205488 Audit Combined Code WEB

Audit Committee InstituteSponsored by KPMGAudit Committee InstituteCombined Code (revised July 2003)The revised Combined Code, issued by the Financial Reporting Council on 23 July, is derived from Derek Higgs’ review into the role and effectiveness of non-executive directors and Sir Robert Smith’s guidance for audit committees.The revised Code contains main and supporting principles and provisions. The Listing Rulesrequire companies to make a two-part disclosure statement. In the first part, companies have to report on how they apply the code principles – in future this will extend to cover both the 14 main and 21 supporting principles. The form and content of this part of the statement are not prescribed. In the second part of the statement, companies have to confirm the extent of their compliance with the 48 detailed Code provisions and explain the rationale behind any non-compliance.It is anticipated that the revised Combined Code will replace the 1998 Code currently annexed to the Listing Rules and apply in respect of accounting periods beginning on or after 1 November2003. The Financial Services Authority will consult on the necessary rule changes, but not on the Code itself.The following pages highlight the changes to the Combined Code.©2003 KPMG LLP , a UK limited liability partnership and the UK member firm of KPMG International, a Swiss nonoperating association. All rights reserved.A DirectorsThe BoardMain principleA.1 Every company should ...