The unique thing about this news is the attention that Infosys Technologies had drawn among the media. I have seen for the first time an Indian company to comply with the SOX act. I searched for the info on more Indian companies but could not get any.
In its quarterly report on Form 6-K filed with the United States' Securities and Exchange Commission (SEC) on October 21, 2005, the company management has assessed internal control over financial reporting with effect from September 30, 2005. The independent auditors, KPMG, evaluated and independently verified management's assessment and issued an unqualified opinion. The assessment was performed voluntarily under the SOX Act, which requires company management to assess and report on company's internal controls over financial reporting.
Infosys known for its corporate governance and financial reporting standards has proved yet again that when it comes to transparency and ethics in the business, It will stand out as the leader and set an example for others to follow. Infosys has won numerous awards in the area of financial reporting notably the ICAI award for the best annual report for 10 consecutive years.
Sarbanes Oxley or SOX as it is called in short is a landmark legislation passed by the Securities and Exchange Commission of the USA for the companies listed on the US Stock exchanges. SOX has numerous sections in it but the section which has got the most attention is the 404. In the first phase of SOX the listed companies have to comply with Sec 404 which Infosys Technologies has achieved. Sec 404 says that Management should assess its Internal controls strictly and ensure that the controls which affect the financial reporting are taken care. Also it says that Top Management like the CEO of the company should sign the annual financial statements of the company and hence be liable for any discrepancy in the same. The reason why Sarbanes Oxley has come into light is because of the increasing amount of corporate scandals and accounting frauds happening in the US and European markets. The best ones are the Enron and Parmalat. Enron lead to the collapse of one of the Big Accounting firm Arthur and Anderson. Parmalat is termed as the European version of Enron.