UK - The Financial Reporting Council is to review its guidance on internal control and risk management to safeguard shareholder investments.
The FRC believes a reassessment of Nigel Turnbull’s guidance on best practice – published in 1999 – is needed following corporate governance developments in the UK and financial scandals abroad.
The review, which will begin later this year, will be chaired by HSBC Holdings group finance director Douglas Flint who was a member of the working party which produced the original guidelines.
He said: “The original objective of the guidance was to help companies manage risk effectively in recognition of their duty to safeguard shareholders’ investments and the company’s assets.
“That objective is as important today as it has ever been, if not more so, as there is increased public interest in demonstrating that public investment markets deserve the trust of those who invest in them.”
Investor lobby group Pensions Investment Research Consultants said reporting had been “bland” since the original guidelines were published.
A spokesman said: “Few companies offer anything more than a basic description of their systems and fewer still give any assessment of the risk factors they consider to be important. We welcome the FRC’s review as timely, and look forward to the promised consultation.”
Revised guidelines will take effect for accounting periods commencing on or after January 1, 2006, with full consultation to be undertaken on any proposals.
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