Quoted companies: ASB reminder on the new enhanced business review requirements

The Financial Reporting Council (FRC) believes that the guidance in the Combined Code on Corporate Governance and its associated guidance on internal control (the Turnbull Guidance) and audit committees (the Smith guidance) continues to be appropriate, but felt that members of audit committees might find it helpful to have a reminder of some of the key issues to be considered in preparing corporate reports in the coming months.

The FRC has therefore prepared additional questions for audit committees to consider when preparing corporate reports. The first group sets out questions which are likely to be relevant to audit committees of all companies, and the second group relevant to audit committees of financial institutions or other companies which make use of complex financial products. While not exhaustive, these questions are intended to stimulate consideration and discussion of the relevant issues.

The FRC believes recent credit market conditions mean that the risks to confidence in corporate reporting and governance are higher that they have been for some years. These increased risks require additional diligence on the part of preparers of accounts, members of audit committees and auditors this year.