He refers to 'an outpouring' of the Committee on the Financial Aspects of Corporate Governance, and to the recommendations contained in it as 'of the Cadbury Committee'. They are draft proposals issued by the Working Group on Internal Control whose membership is drawn from the accountancy profession and representatives of the preparers of accounts.
On the first page of the draft guidance this Committee recommended that: 'The accountancy profession, in conjunction with representatives of preparers of accounts, should take the lead in: a) developing a set of criteria for assessing effectiveness; b) developing guidance for companies on the form in which directors should report.' The debate is over how best to achieve those aims. Mr Warner would also have seen that the Working Group included practising finance directors, so it was not drawn up by auditors writing 'a dream ticket'.
The unforgivable error, given that Mr Warner knew that the document was a draft, is his allegation that companies are going to be made to implement it - 'public companies are often forced to comply with some pretty daft regulations and directives but this . . . really does take the biscuit.' The Working Group has opened up the debate, which will be between the preparers and users of accounts. There will be nothing to comply with until the debate has reached a conclusion.
Finally, I must formally make the point that I have nothing to apologise to anyone for, as this letter will have made clear. I have not had discussions with finance directors in private, as Mr Warner alleges.
Committee on the Financial Aspects of Corporate Governance
The London Stock ExchangeReuse content