Based on a study of 10 UK-listed companies’ disclosures between 2000 and 2016, Joshua Obeng-Nyarko at the University of Essex found improvements in firms’ internal controls disclosures after the introduction of the US Sarbanes-Oxley Act (SOX) in 2002.
The study concludes: “The findings show that internal-control disclosure shifted from brief, often formulaic references to more explicit, structured and risk-oriented reporting.”
Obeng-Nyarko found that UK companies reporting in the USA increasingly linked internal control to disclosure controls, executive certification, financial reporting controls, management assessment and audit committee oversight.
Even amongst UK firms outside the scope of to the SOX requirements, the study found that disclosures included fuller discussions of risk management, risk registers, internal audit, whistleblowing and control review.