AMENDMENTS TO THE HANDBOOK (NO. 14), Financial Services Authority Consultation Paper 04/8, Chapter 8
Chapter 8: Proposed amendments to the Listing Rules
Comments from ACCA
July 2004
ACCA is pleased to comment on the proposed amendments to the Listing Rules relating to the responsibilities of auditors under the Combined Code.
The Consultation Paper sets out the background to the proposals and the FSA's considerations of five Options.
There is currently uncertainty over the eventual responsibilities of auditors in respect of the Operating and Financial Review and reporting on internal control. Such responsibilities are highly relevant to the responsibilities of auditors under the Combined Code.
During the period before such responsibilities are determined, ACCA believes that it is appropriate to give investors continuity in approach through requiring auditors to continue to report on those provisions of the Combined Code that are objectively verifiable. ACCA supports, therefore, the FSA view that it should proceed only with Option 2 (as set out in the Consultation Paper).
While the proposal to proceed only with Option 2 is argued for reasons of practicality, it is recognised that consideration must be given to raising current standards by an extension of the auditors' responsibilities under the Combined Code.
The early indication by FSA of its preferred option in relation to a transition period has been helpful, as it has allowed companies and auditors to plan ahead with a degree of confidence. While the need for a transitional period depends on the nature of the requirements that are implemented, if Option 2 is chosen, we agree that there should be no need for transitional measures.