The European regulation requiring the use of international accounting standards from 2005 and the DTI’s consultation paper; the interim report from the DTI and Treasury Co-ordinating Group on Audit and Accounting Issues; the Sarbanes-Oxley Act of 2002; the Auditing Practices Board paper on prioritising its work agenda and its briefing paper on communication between audit committees and external auditors; the ICAEW paper on prospective financial information; the FSA consultation papers on investment analysts’ conflicts of interests and the review of the listing regime; the Higgs review of the role of non-executive directors; the prospectus directive and the transparency obligations directive; FREDs 23 and 30 on financial instruments; the Company Law White Paper; the government’s review of the Accountancy Foundation; the Commons Treasury Committee report on the financial regulation of PLCs.
All in all, this list represents thousands of pages of thought and action in the realm of corporate governance and financial reporting – or “accountability”, if we were to boil it all down to just one word. Two things spring to mind when considering this list. The first is that FDs – and not just those on the boards of quoted companies – are going to be very busy digesting all this material, much of which may well turn out to be conflicting, contradictory or just plain, dumb duplication. Everyone wants to jump on the corporate governance bandwagon – not least because our jobs and pensions depend on getting it right – and everyone in a position to do so wants to be seen to be doing something about it.
Everyone, that is, except – well, that brings me to my second point, which is, as Howard Davies points out in this month’s interview, that FDs should take part in the formulation of policy by responding to the consultation papers and having input into the discussion documents. That may involve writing letters to the relevant authorities or taking part in surveys – or, as one reader has done on page 21, telling us your views and letting us share them with the rest of our influential readership.
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