J-SOX COMES TO AMERICA
J-Sox in the US.
By Cheryl Rosen

In a reversal of the usual story, some US finance executives now find themselves complying with Asian corporate governance regulations.

One of these is Dave Sackett, the corporate controller of Ulvac Technologies. Sackett is charged with implementing J-SOX – the Japanese edition of the Sarbanes-Oxley Act (sometimes abbreviated as SOX). The process is a “huge deal” at the US-based subsidiary of Ulvac of Japan because the private firm (the parent is public) has never thought much about documenting internal controls or formalizing its audit trail. “Our reporting has been kind of loose in the past, but now we need to document everything,” Sackett says.

Japan passed its slightly less onerous version of Sarbox in June 2006. Now, working with auditors from US-based Oishi & Co, Sackett is instituting procedures such as linking employee hours to products by work order, creating a signature-authorization document for expenses, and installing a J-SOX-compliant ERP system.

Natasha Nelson, chief ethics and compliance officer at pharmaceuticals company Daiichi Sankyo in the US, is another American coping with J-SOX. She’s trying to avoid the mistakes some of her peers made when implementing Sarbox. With the support of company executives in Japan, she rolled out a strong whistleblower program, hired staff with Sarbox experience, and even test-audited a process. She learned not to over-document, she says, and to attend lots of seminars “to get the credentials we need to fully understand all the aspects of Sarbox.”