Four out of every ten US multinationals would be unable to comply with the SEC regulations on quarterly and annual reports if they were implemented immediately, concludes a recent report by Pricewaterhouse Coopers. SEC rulings to be implemented by 2005 dictate that corporates must file quarterly reports in 35 days and annual reports within 60 days of the period end.
In response to the rulings 59% of respondents to the survey said they would use their existing infrastructure while 29% plan on upgrading their reporting systems ? 8% will opt for increased investment in IT.
"Companies will need faster and better-managed month-end closing procedures to meet the new timetables", said Tom Watson, a partner at PwC. "The SEC has been pushing for accelerated filings as a way to improve investor confidence in the wake of corporate and accounting scandals. As the SEC focuses in on speed, it will also expect management to provide higher levels of accuracy in the numbers, to display a better understanding of the results, and to communicate those results in much richer detail."
Almost half of the respondents viewed the changes as a significant challenge to the business and harbour concerns over inconsistent reporting processes and inefficient IT infrastructure.