Letters to the Editor

Dear Editor,

Letters to the Editor

Your recent article about the introduction of J-SOX was very interesting and informative. With J-SOX being a regulation, as opposed to a familiar market trend, this phase of change is definitely intriguing.

As you stated in your piece, Japan has just over 5% of the number of certified public accountants than the US. By implementing a risk-based top-down approach the strain on SOX-fluent resources should be minimalized, however, this theory relies heavily on the effective introduction of compliance focused software and database management systems.

Having lived in Japan for some time and with good experience of Japanese business operations, personally, I am pessimistic as to how traditionally ‘techno-adverse’ small and medium-sized operators will fare under the new requirements.

The likes of Oracle Japan has seen this new market as lucrative and has been promoting compliance software and consulting products aimed at the smaller operator. IDC Japan were talking of the J-SOX compliance market reaching somewhere around ¥260 billion in 2008. My question is simply, are the small-medium sized operators really aware of the complexities of compliance in general?

With that said, foreign-affiliated companies here in Japan have been working under the collective shadow of Paul S and Michael O for some time now. There are a number of qualified and experienced SOX authorities holding Japanese passports and working out of offices capitalized from offshore. Are these people not now also immensely desirable market necessities? Are the headhunters working the domestic companies for fat fees to bring skilled SOX gurus back to the Japan-side?

Thomas L Friedman said the world is getting flat but Japan has long been the graveyard of practices and products long forgotten around the globe.

John Sachs,