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 response Member State regimes Best practice Scandals Member 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 Manage risk Disclose process Disclose Management of risks Disclose effectiveness conclusion Risk management and internal control Financial reporting Compliance Operational and strategic 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 4 th /7 th disclosures? 9 FEE disclosure principles? 7 5 FEE matrix? An EU framework? 68 Accounting records law?

Slide 7 Risk Management and Internal Control in the EU Responses to Discussion Paper Robert Hodgkinson 25 October 2005