For some, the last financial year will have brought more than its fair share of headaches as they sought to comply with the stringent requirements of the Financial Services Authority (FSA) in the UK, the Sarbanes-Oxley Act in the US and the European Basel 2 directive.
Key concerns include:
The personal liability of the chief executive and chief finance officer for ensuring annual reports fairly present their companyâs financial condition and the results of operations.
The requirement for internal controls to ensure that financial results are fairly and consistently recorded and that any fraud is reported.
The need for the annual report to describe and assess the internal controls used by the company to ensure accurate financial reporting.
Andrew Newcombe, compliance specialist at the technology company Datawatch, said: "Breaches of these and other requirements can lead to directors being prosecuted. There may also be hefty fines which, in the case of the FSA, can run into several million pounds."
The FSA is calling for better information security by financial firms in the fight against hackers and fraudsters. In a recent report, "Countering financial crime risks in information security", it states that while many larger companies have addressed problem, small and medium-sized businesses are still vulnerable.
Datawatch offers a software solution to help businesses protect themselves and their customers - particularly UK companies listed on the US stock exchange, which are required to comply with Sarbanes-Oxley.
According to Andrew Newcombe, there are several products on the market offering compliance software, but the Datawatch approach is unique. He said: "We supply proven business solutions which turn every report into live auditing data so companies can obtain a 'paper trail' on the state of their core accounting system databases. Multiple sources of information, including source databases and published reports, can be quickly and accurately cross-referenced, providing a set of internal controls which are compliant with Sarbanes-Oxley."