Key success factors to sustainable compliance with section 404 of the Sarbanes-Oxley Act - Are the recommendations from American accounting firms considered useful by Swedish companies? A case study of Volvo Car Corporation and Volvo Financial Services

Abstract

Background and problem: The implementation of the Sarbanes-Oxley Act in Swedish companies is in the transition phase between project and process. To address the issue of how to reach a stage of sustainable compliance, the large American accounting firms have identified a number of key success factors. Considering that American and European companies use different models of internal control, can Swedish companies still benefit from the experience and advice of these accounting firms? Purpose: The aim of this study is to obtain an understanding of how Swedish companies that have implemented the Sarbanes-Oxley Act plan to reach sustainability, and whether it is in accordance with how American companies are recommended to do. Method: The study is of a qualitative character based on three interviews. Of those, two were made with employees at Volvo Financial Services and one at Volvo Car Corporation. The analysis of the empirical material is based on the guidance presented by American accounting firms as the solution to companies striving towards sustainable compliance to the Sarbanes-Oxley Act. Information from articles and literature on the topic is added to enrich the discussion. Furthermore, theories about implementation processes and organizational change are included to serve as a complement for the analysis. Result and conclusion: The factors Volvo Financial Services and Volvo Car Corporation consider essential for a sustainable implementation of the Sarbanes- Oxley Act do not appear to differ considerably from the key success factors presented as important according to American accounting firms. However, it seems cultural differences might have caused different control systems to develop in Sweden and the US. If the people involved have problems to see the necessity of extended controls, it might be harder for Swedish companies to reach a sustainable stage.