According to the APB, the guidance includes important guidance for auditors when reviewing internal control disclosures arising from the Turnbull report.
It also consolidates all the APB's existing guidance on corporate governance.
It is called Bulletin 1999/5 'The Combined Code: Requirements of auditors under the Listing Rules of the London Stock Exchange.'
With the publication of the Turnbull guidance, the Stock Exchange considers that compliance with all aspects of the Combined Code and, in particular with those aspects of it relating to internal control, is now possible.
The objective of the auditors' review is to assess whether the company's summary of the process the board has adopted in reviewing the effectiveness of the system of internal control, is both supported by the documentation prepared by the company and appropriately reflects that process.
Auditors report on their review by exception only. The Bulletin provides guidance for auditors in drafting their audit opinion when they conclude, for example, that the board's disclosures arising from the requirements of Code provision D.2.1 do not reflect the auditors' understanding of the process undertaken.
Ian Plaistowe, APB Chairman said: 'The APB warmly welcomed the guidance issued by the Turnbull Committee which should result in useful disclosures by companies about their risk management and internal control processes. This Bulletin sets out the approach the auditors should adopt with respect to the review they are required, by the Listing Rules, to make. The London Stock Exchange considers our approach to be consistent with its Listing Rules' requirement.'
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