Making IT compliant with the proposed Companies Bill could cost businesses millions of pounds, according to analyst the Butler Group.
The aim of the bill is to tighten up accounting procedures and auditing to avoid repeats of high-profile business failures like Enron and Parmalat.
These aims are a positive move, but business should be aware that the terms will put a similar pressure on business as the Sarbanes-Oxley Act in the US in terms of the necessary investment in software compliance, says Butler Group senior research analyst Mike Davis.
'While the UK has always had better auditing standards than the US, the Companies Bill tightens these up still further.
'However, as with Sarbanes-Oxley, the only efficient and cost-effective way for UK businesses to meet the Companies Bill requirements will be through the investment in certain key technologies.
'Failure to make these investments quickly and correctly will leave UK businesses prone to severe financial penalties,' said Davis.
Technologies that will be key to compliance include business process management systems, disaster recovery, email management, identity and access management and network security, he says.
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