Over at ZDNet, I’ve written an analysis of what I see as the possible impact of new SEC guidance under Reg FD. In essence, the SEC is pointing the way towards company websites and blogs in particular being used as an alternative medium by which information is made available to the public. It’s a novel idea but not one I see as having an immediate impact except in one specific scenario. Good ol’ Sarbanes-Oxley compliance rules still apply so where the new guidance is used, I reckon both the legal and audit people will have kittens.
However, it does open up an interesting question for non-US companies. Since the SEC has taken this lead, what will the other bourses do? Will the FSA for example fall into line? If so then how might they seek to take a leadership position?
When I read US 10-Q’s and 10-K’s, I’m always astonished at the lack of information they contain. Despite being lengthy documents, I rarely find the sort of nuggets I’d expect to help me get a better understanding of what’s going on. Compare that with published UK accounts and there are any number of clues on performance. I don’t really have to go to Companies House and dig out the detail. If anything, I’d argue the glossy PDFs are a treasure trove of information. Now if the FSA would nudge UK companies into mashing up the sort of information that resides at Companies House with the glossy detail and present that in blog form, then I’d be seriously impressed.
Right now, the debate is restricted to the narrow ‘press release’ view. I suspect that once people see the potential, then it is feasible to imagine a situation where corporate websites become a heck of a lot more dynamic and interactive. If that happens, then it has a direct impact on professionals. They’re bound to be called upon to consider the website as an extension of the ‘stuff’ they review and audit. If I am correct, then it radically changes the shape and scope of what comes under the microscope.
In the ZDNet piece, I question whether the Big Four can realistically undertake this sort of work. If they’re smart, they’ll figure it out. (And yes, I have a few ideas in that direction.) But more likely, we’ll find that a new form of professional grouping will emerge that pays far more attention to the risk aspects and seeks to be a lot more thorough about reviewing risk controls and the processes around those.
Whatever happens, it will be an intriguing set of developments. And as I say in the ZDNet piece, those selling governance, risk and compliance software will likely have a field day.
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