American companies aren't the only ones frustrated by the financial burdens of Sarbanes-Oxley. A growing list of foreign companies are delisting from U.S. stock exchanges— including German biotech Lion Bioscience and Nordic telecom TeliaSonera AB—to avoid complying with SarbOx. The actions prompted a statement by the SEC in early February that the agency is considering postponing for one year the deadline for foreign companies to comply. At the moment, foreign firms whose shares are listed on a U.S. exchange are expected to comply with SarbOx by July 2005.

While the delay would certainly help, says Rhian Chilcott, who heads the Washington, D.C., office of the Confederation of British Industry, it doesn't address the larger problem at hand. The U.S. is busy writing and rewriting accounting laws while the rest of the world—roughly 70 countries so far—is slowly conforming to the International Financial Reporting Standards (IFRS), as all European Union public companies did as of January 2005. Since the IFRS has governance rules and thorough accounting frameworks already in place, Chilcott says it's unreasonable to expect foreign companies to go through the added processes and costs of end-to-end SarbOx compliance. "It's an unnecessary step that we don't think adds to the sum of human knowledge," she says. Instead, she says, the SEC should recognize international accounting rules and make certain aspects of SarbOx, such as Section 404, easier to comply with. The SEC has acknowledged the issue and is "giving it serious consideration," says spokesman John Heine.

Until a solution is found, Chilcott says, the real problem for the U.S. economy is not just the number of companies delisting, but " the companies that would have listed, but now won't. Across the board, people are reconsidering."

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