Due to the short notice involved, it is possible not all members will attend, but group chairman and HSBC finance director Douglas Flint is keen to establish the team?s terms of reference in order to get the review underway, according to a Financial Reporting Council spokesman.
The meeting should determine which areas of the original Turnbull guidance, published in 1999, need to be reviewed and how the review will be carried out. ‘Although Douglas and the rest of the team have individually met with [FRC chairman] Sir Bryan Nicholson to discuss the review, they have not had the chance to get together and discuss how they are going to do the job,’ said the spokesman.
Flint?s team consists of numerous heavy-hitters from the business world, including John Coombe, CFO of GlaxoSmithKline, Paul Walsh, chief executive of drinks group Diageo, Michael McLintock, chief executive of fund managers M&G, and Tony Watson, chief executive at Hermes Pension Management.
Flint was also one of the members of the team that drew up the original Turnbull guidance. The ICAEW will also provide the team with project management assistance, as it did for the initial guidance.
It is widely thought that the review will introduce requirements for auditors to make a judgement on the quality of a client?s internal controls, similar to section 404 of the Sarbanes-Oxley Act, which places this requirement on auditors of US-listed firms.
As part of its remit, there will also be a sub-group of the review team that will this year issue recommendations for companies registered with the Securities and Exchange Commission on the use of current Turnbull guidance as a framework for complying with 404.
Work on the full review will begin in earnest later in the year with any changes to the guidance coming into force for accounting periods beginning on or after 1 January 2006.
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