COMPANIES THAT STRUGGLE with appropriate risk disclosure in their financial reports need more education, according to Auditing Practices Board chairman, Richard Fleck.
APB umbrella body the Financial Reporting Council yesterday called on companies to focus on strategic risk and avoid cluttering reports with reams of minor business threats.
Fleck (pictured) said more education is needed to ensure all companies are up to standard, adding: “It’s clear that major businesses recognise this as a big step forward.”
The Chartered Institute of Internal Auditors has thrown its weight behind the report, saying, “guidelines on how companies should report their risks would be a huge step forward”.
It agreed that “the problem is not a lack of information, but a lack of properly focussed information” and said audit committees will need more support to execute their responsibilities.
PwC welcomed the FRC’s proposal of a wider remit for audit committees.
Richard Sexton, board member responsible for reputation and policy, argued against the suggestion of ten-year tendering, though, saying: “Shareholders already vote on the appointment of auditors on an annual basis and have a continuous influence over auditor appointments through non-executive directors – their representatives on the audit committee.”
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