China SOX - When will it take effect?

The basic standards for internal control of enterprises ["China SOX" or "C-SOX"] were announced in China in the summer of 2008. However, there is still confusion in the market when the market is in force more than a year after the announcement of new risk management and internal control regulations. This confusion has had an impact on the planning and execution of many of China's compliance programs that require Chinese SOX.

There are currently three dates considered to be a possible timeline for the adoption of SOX in China. I will list each of them and give background and drivers to explain why they may be actual implementation deadlines. Of course, we are still waiting for the official confirmation of the Chinese Ministry of Finance, but it is worth reviewing the information we have heard from the market. The potential start date is:

1] from

July 1, 2009. from

 This is the scheduled start date when the basic standards for internal control of the enterprise were originally released. Yes, it is over, so we should already know if this is the date when Chinese companies should start their C-SOX compliance work. The government wants to stick to the existing timetable and show that it makes sense to take seriously the corporate governance and risk management reforms in the Chinese market.

2] from

January 1, 2010. from

 Many companies complain that China's SOX regulations initially declared the regulations too vague, and the financial crisis required them to focus on other aspects of their business to maintain operations. This puts pressure on regulators to delay the required start date to provide more breathing room for the company during the economic crisis. It also provides the government with extra time to refine the details of the rules and ensure that they are clearly stated to the market.

3] from

January 1, 2011. from

 Recently, some market analysts have said that the full implementation of China's SOX will begin in early 2011. They believe that this will give the market enough time to recover from the financial crisis and provide the government with the time it takes to release. C-SOX Implementation Guide [committed at the end of 2008].

I guess? I believe that the Chinese government believes that the value of implementing real reform lies in the way corporate governance and risk management. Most analysts believe that China has completely shaken off the financial crisis [or at least not as affected by many Western countries] and wants to ensure that future crises are avoided. This makes me think that the implementation of the basic standards for internal control of enterprises will begin in January 2010, and the company expects to submit detailed internal control reports by the end of 2010. Any further delays may undermine the value and information of this new regulation.

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