BOC is facing a £20m Sarbanes-Oxley compliance bill – much more than the company first estimated.
The news will also affect other gas companies which have to comply with the regulations laid down in America.
BOC says the costs will have to found over the next two years in order to bring it into full compliance with the regulations of the bill. The deadline for full compliance in financial reporting and internal IT controls is September next year.
The Sarbanes-Oxley regulations were introduced by the US in order to prevent another Enron scandal but businesses have been increasingly calling on the rules to be relaxed because of the high costs of bringing the processes into compliance.
The Confederation of British Industry has called for changes to the bill claiming it is too onerous and costly. BT has threatened to de-list from the New York Stock Exchange because of the high compliance costs.
The legislation was signed off in 2002 with the intention of preventing financial malpractice and accounting scandals. Known as SOX, it covers a range of governance issues including those covering the types of trade which are allowed within a company with an emphasis on keeping everything above board.
Measures include forbidding personal loans to officers and directors, also regulating the responsibilities of audit committees and protection to whistleblowers. Much of the challenge to businesses is ensuring compliance can be demonstrated and accurately monitored and reported.
Another area businesses have to focus on is the archiving of all communications and the creation of transparent and auditable systems for recording transactions, dealings and any business correspondence. Applications such as IM are also being singled out as areas which need to be secured and made clearly accountable.