The FRC set up a group chaired by Douglas Flint (Group Finance Director, HSBC Holdings plc) to review the Turnbull guidance on internal control. The review group issued a consultation document on 2 December 2004. The group sought views on the effectiveness of the guidance, in what ways it may need to be updated, and what information companies should be asked to disclose to their shareholders. Members of The Institute were able to contribute to the development of the Institute's response, by completing a survey on this website and through certain forum meetings. The resulting response is given here.

We suggest that more work is required to provide a meaningful framework on which to base disclosures to shareholders on the conclusions on effectiveness of internal control. We strongly support the risk-based and principles-based approach to assessing internal control and suggest that this should be strengthened. We recommend that the guidance be redrafted in the form of an assurance framework combining together risks, responses and assurance from different sources.

We expect further opportunities to contribute to the Review over the next few months. As these arise, we will provide information on the web-site.