Investors and analysts outside the US are not well informed about Section 404 of the Sarbanes-Oxley Act and are concerned about the potential impact of negative disclosures, according to a new PricewaterhouseCoopers survey of investors and analysts in North America, Europe and Asia who cover US-listed companies.
Due in part to widespread publicity, 77% of respondents in the US say they know "at least a little" about Section 404. That number falls to about 60% in Europe and 40% in Japan. The survey, taken in January, is the first to assess how Section 404 is perceived in the global capital markets. These findings strongly suggest that companies, auditors and regulators still face an up-hill battle to ensure that the marketplace understands and correctly assimilates the information that will be disclosed in the new Section 404 reports which are just beginning to be released. To that end, the Big Four have worked individually and collectively to educate market participants on the impact of Section 404, as well as the other benefits – from better corporate governance, increased transparency, and improved oversight of the accounting profession -- resulting from the Sarbanes-Oxley Act. For more information on these initiatives, visit www.pwc.com/SOX.