The Government Companies Authority will require chairpersons, CEOs and CFOs of government companies to sign financial reports.
The Government Companies Authority has adopted part of the US Sarbanes-Oxley Act of 2002, and will apply it to companies under its jurisdiction. An official announcement to this effect will be published today.
The Government Companies Authority notified the accountancy firms and auditors for government companies about the new guidelines yesterday. The key guideline: chairmen, CEOs and CFOs of government companies to sign declarations attesting to the veracity of financial reports.
The US Securities and Exchange Commission (SEC) ordered similar declarations in the aftermath of the Enron scandal, and they are stipulated in the Sarbanes-Oxley Act. The result is that if financial reports are found to be misleading either due to malicious intent or gross negligence, the corporate officers signing the declarations can be found criminally liable.
At this stage, the new guidelines will not apply to the three publicly-traded government companies - Bezeq (TASE:BZEQ), El Al (TASE:ELAL), and Ashot Ashkelon Industries (TASE:ASHO)- in order to give the Israel Securities Authority time to issue similar guidelines of its own, if it intends to do so.
Published by Globes [online] - www.globes.co.il - on February 25, 2004