Process to report in a Joint Venture 2041

  • We have found a problem with an international company established in several countries that has one subsidiary settled in US, reporting to SEC, and other subsidiary (European) has formed a Joint Venture (50%) to commercialize his products. Our question is about if processes from Joint Venture company are obliged to comply with SOX?

  • The joint venture is not obliged to comply with SOX if it is not US listed. Even if it is listed it may not consider this element of its business material and descope it for SOX testing.
    I have such a joint venture company in my business but I do have to comply with SOX. Therefore it is my responsibility to ensure that I have sufficient controls to satisfy myself that my accounts cannot be materially misstated. This may involve creating/agreeing controls with our joint venture that I can evidence and test even though they, as a company, do not have to comply with SOX. This comes down to our professional and contractual relationships.
    Alternatively I work hard to descope this element of our business on grounds of materiality and risk.

  • Thank you very much for your kind information…

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