UK Corporate Governance Code revision receives thumbs up from ICAS
The Institute of Chartered Accountants of Scotland (ICAS) has welcomed the revised UK Corporate Governance Code as a step in the right direction.
Bruce Cartwright, chief executive at ICAS, said: “We support the FRC’s approach to streamline changes to the new Corporate Governance Code. We believe this better balances governance needs and proportionate regulation, while still being mindful of wider objectives to promote economic growth and making the UK an attractive place for business.”
He expanded: “We’ve been disappointed in the pace of audit and corporate governance reform by the UK government, but we believe this is a step in the right direction. We’re pleased to see the streamlining of reporting and clarification that the ‘declaration of effectiveness of internal controls’ focuses on material controls at the balance sheet date.
“We also welcome the inclusion of an additional year for implementation, as we think that providing a declaration on all material controls could be challenging for some companies. However, supporting guidance needs to clarify how businesses can implement this on a consistent, proportionate and efficient basis.”
Mr Cartright added: “It’s good to see more emphasis of the board’s role throughout the code and that the audit committee responsibilities on non-financial reporting are more clearly defined and aligned with their responsibilities in relation to the annual report and accounts.
“We believe that the revised code and its application of the ‘comply or explain’ principle will provide a strong foundation for high quality, corporate reporting in the UK. Keeping reports focused on significant and meaningful content will help to keep annual reports readable and relevant.”