When the Sarbanes-Oxley (SOX) Act passed in 2002, it dramatically changed auditing in the United States, giving many internal auditors new responsibilities. Now, the United Kingdom is in the midst of an auditing overhaul, with proposed reforms being dubbed UK SOX.
These new reforms intend to strengthen audit controls, following the collapse of big companies like Carillion and BHS. Audit oversight in the government will shift from the Financial Reporting Council (FRC) to a new regulator, the Audit, Reporting and Governance Authority (ARGA), which the UK government says will be stronger.
While the new specific audit requirements may take a couple of years to become finalized, internal auditors can start to learn about these reforms and begin positioning themselves to adapt. Otherwise, compliance could be difficult, prompting audit teams to scramble to find SOX compliance tools at the last minute.
Here are three things to understand about audit reform if you’re at a UK-based company:
