Chartered Institute of Management Accountants

11 April 2002

CIMA delivered its oral evidence yesterday to the Treasury Committee inquiry into the financial regulation of public limited companies in the United Kingdom. Later this year, the Treasury Committee will make recommendations to the House of Commons on ensuring the effective regulation of multinational companies and relevant corporate governance issues.

CIMA delivered four key proposals to the Committee:

• The principles-based approach of the UK Accounting Standards Board and the International Accounting Standards Board, which require financial statements to reflect the substance of a transaction, is more preferable to the prescriptive approach that exists in the US. Despite the UK's relatively robust framework, we cannot be complacent as there is room for continuous, incremental improvement.
  

• FSA letter to all directors of listed companies emphasising their responsibilities.
  Quality input from non-executive directors is central to corporate governance working in organisations. CIMA suggested that a Code of Best Practice for the role and professionalism of non-executives is developed with respect to their:

Roles, responsibilities and professionalism
Training
Need to ensure time to give a high quality and diligent contribution
Independence.

• The need to reinforce the importance of sound internal management and control systems and the value of internal audit. Business risks need to be systematically evaluated, monitored and managed on a transparent basis.
  

CIMA's oral submission was based on its earlier written submission which is available for download from this page.

If you would like more information please contact Stathis Gould
Phone: +44 (0)20 8849 2379

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