Slide 1

Risk Management and Internal Control in the EU

Responses to Discussion Paper

Robert Hodgkinson

25 October 2005

Slide 2

Risk Management and Internal Control

Discussion Paper

Brussels Forum

EU responseMember State regimes Best practice

ScandalsMember State responses US response

Slide 3

Key proposals

Recognition of the business case for risk management

Need for research and learning from experience

Evolution and phased implementation

Alternatives to legal requirements

Auditor caution

Slide 4

Evolutionary path

Managerisk

Discloseprocess

DiscloseManagement

of risks

Discloseeffectivenessconclusion

Risk management and internal controlFinancialreporting Compliance Operational

and strategicIncreasing difficulty

Increasing difficulty

Requirements

Best practice

Slide 5

Sources of input

FEE member bodies and accounting firms

Risk management specialists and organisations

Regulators and standard setters

Business representatives

Investors

Slide 6

Discussion Paper questions

Role for regulation?

10

Evolutionary issues?

11/12

FEE regulatory principles?

3/4

2

Focus on listed companies?

Adequate audit assurance?

13

Assurance on disclosures?

14

Criteria for 4th/7th

disclosures?9

FEE disclosure principles?

7

5

FEE matrix?

An EU framework?

6

8

Accounting records law?

Slide 7

Risk Management and Internal Control in the EU

Responses to Discussion Paper

Robert Hodgkinson

25 October 2005