Issuers outside the US who fall under Section 404 are required to file audit reports relating to internal controls for the first fiscal year ending on or after that date.

This includes documented financial processes, risk assessment and financial reporting controls.

Australian companies can expect a few mistakes. In the U.S., one in six companies failed to meet Sarbanes-Oxley (SOX) compliance in the first year.

KPMG LLP's Australian head of Sarbanes-Oxley compliance, Brian Bogardus, said it is hard to say why these companies are failing as there are too many complexities involved, adding that the Securities and Exchange Commission (SEC) disclosures do not go into tremendous detail.

Bogardus said one area where companies struggle is the impact of IT on internal reporting, because the solutions are not simple.