Resources for Sarbanes-Oxley (SOX)

Canadian IT execs face 'J-SOX' compliance rules

www.itworldcanada.com

The Japanese version of the Sarbanes-Oxley Act to be enacted next April will provide previously lacking guidance for IT departments around ensuring internal controls meet compliance requirements, according to Canadian analysts.

Nicknamed J-SOX, Japan's Financial Instruments and Exchange Law will apply to publicly traded companies on the Japanese stock market and Canadian subsidiaries of Japanese parent companies, requiring them to implement internal financial reporting controls. The regulation is expected to affect 3,800 companies.

The differentiator between J-SOX and other versions of Sarbanes-Oxley is that Japanese oversight boards have developed their own internal control framework, said Ross Armstrong, senior research analyst with London, Ont.-based Info-Tech Research Group. "The point of any control framework is to assist IT departments in building and maintaining secure internal controls, which is a fundamental requirement of whatever flavour of SOX you wish to look at."

Although the COSO framework is widely used under the Canadian and U.S. versions of Sarbanes-Oxley, it's not mandated, said Armstrong. With J-SOX, on the other hand, the makers of the framework are openly advocating it.

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