According to Brendan Mulholland, a partner at KPMG LLP, companies are also failing to identify which compliance regulations apply to them, and are depending too much on technology.
"In the UK the biggest problem is a skills shortage," said Mulholland. "On the outside view, the world would think that it's all fine. But people are scratching around using every resource available to them to solve the [compliance] problem."
Mulholland quoted an Oracle survey which said that more than 50 percent of the banks were also finding it tough to crack the compliance challenge.
"Most people imagine that banks wouldn't have that problem," he said. "But because of the skills shortage, they are struggling to deliver on Basel II."
Sarbanes Oxley and Basel II are just two of many regulations that require businesses to improve their auditing practice. The upshot of this has meant that companies have had to store all their electronic data, such as emails and instant messenger conversations, for seven years.
But Mulholland warned chief information officers and IT managers that throwing technology at the compliance problem would not solve the problem.
"Too often we look to technology to solve this," said Mulholland. "But people and processes are just as important. This should be a board level issue. To get it right, you need to have a high level of responsibility."
Mulholland added that companies were beginning to experience 'compliance fatigue' as a result of vendor messages: "People have been banging on about Sarbanes-Oxley for ages. Some companies are confused about vendor messaging -- they are starting to switch off about compliance."
Fifty-five percent of IT managers have yet to create a compliance plan, Mulholland added. He said that 27.3 percent of companies were ignorant of which regulations applied to them.
