The Canadian Bill 198 also known as C-SOX is quite equivalent to SOX. So, a company that is publically traded in Canada has to ensure compliance with Bill 198 requirements. Technically, SOX can not be enforced outside the United States but, this is only true for in certain case scenarios. For companies that are publically traded in Canada and are also listed on NYSE or NASDAQ, or cross listed, have to ensure compliance with SOX and BILL 198.
Similarity & Differences
SOX and BILL 198 share many similarities yet they are not the same. Bill 198 enacted as Chapter 22 of the Statutes of Ontario, brought in measures that are very similar to the SOX that is implemented in the United States. For instance, as per Canadian Securities Administrators (CSA) the opinion of external auditors is not required on the internal control assessment of the company. The MI 52-109 of Canada (Multilateral Instrument 52-109) is very similar to the SOX 302, but SOX 404 implementation is not required for Canadian companies, while SOX 404 is required for companies publically traded in Canada. As you can see, there are a lot of differences as well as similarities among the Acts. As a publically traded company in the United States, compliance with SOX is just a matter of maintaining documentation, ongoing testing, and making sure responsibility for internal control is taken by the operating departments. Although, this would be enough for investor confidence in the United States, it is always wise to consult a lawyer or an expert on the subject matter.
Remote Chance & Reasonable Assurance
As per US SOX, the internal control has to make sure the the risk is reduced to a remote chance, which is more stringent when compared to the SEC guidance issued during 2007, which followed Canada’s “reasonable assurance” requirement. The CSA requires Canadian companies to deliver a “reasonable assurance” to prevent risk of material misstatement. In order to give that assurance, organisations are expected to display high levels of commitment, care and precision when it comes to reviewing and documenting internal controls.
Sarbanes-Oxley Act of 2002 (SOX) was brought into existence as a reaction to the financial scandals related to Enron and WorldCom. Protection of shareholders and the general public from accounting errors and fraudulent practices in the enterprise was the guiding rules of the SOX Act which is administered by the U.S. securities and exchange (SEC).