Internal control - The Turnbull Report and Implementing Turnbull: A Boardroom Briefing

Internal Control

For the Revised Turnbull guidance (October 2005), visit http://www.frc.org.uk/corporate/internalcontrol.cfm.

Review of the Turnbull Guidance

On 16 September 2005, the Institute submitted its response to the Turnbull Review Group's Review of the Turnbull Guidance on Internal Control:Prosposals for updating the guidance to the Financial Reporting Council (FRC). To view our response, click here. (PDF: 51 KB / 2 page).

In June 2005, the Review Group published its finding from the initial consultation exercise and draft revised guidance for comment. Subject to the results of this second consultation, the intention is that the revised guidance will come into effect for the financial years beginning on or after 1 January 2006.

On 2 March 2005, the Institute submitted its response to the evidence gathering consultation document to the Review Group. To view the response, click here. (PDF: 57 KB / 10 pages).

In December 2004, an evidence gathering consultation document was issued and is available from http://www.frc.org.uk/corporate/internalcontrol.cfm.

In July 2004, the FRC announced a review of the Turnbull Guidance.

If you are a director or a member of management of a company which is listed on the London Stock Exchange, or is considering a listing, the guidance on internal control issued by the Working Party chaired by Nigel Turnbull should be near the top of your agenda. The purpose of Implementing Turnbull: A Boardroom Briefingis to set out a number of questions which you could be asking and some practical steps which you could take to meet the Working Party’s recommendations.

This briefing has been prepared for directors and senior managers who wish to take straightforward steps towards implementing Turnbull or are interested in the practicalities of good risk management and internal control and in getting added value for their companies from the guidance. It may be of particular use to smaller listed companies and a number of the case studies, hot tips and examples which it contains are prepared with such companies in mind. It is assumed that readers will also study the Working Party’s guidance in full and therefore does not go into the detail of the guidance. Indeed, the briefing should read in conjunction with the guidance. However, the briefing does guide you through the issues raised when complying with Turnbull.

The key messages are as follows:

      • Do not delay in implementing Turnbull
      • Obtain management buy-in at all levels of the organisation
      • Prepare a plan
      • Identify clear company objectives
      • Prioritise the risks to the achievement of the objectives
      • Establish a clear risk management policy and control strategies
      • Consult throughout the business
      • Improve the business culture where appropriate
      • Keep it simple and straightforward
      • Monitor continuously
      • Avoid audit committee overload
      • Incorporate Turnbull in your management and governance processes
      • Aim to obtain business improvement when implementing the guidance

      Clearly the process that needs to be followed must fit the circumstances of the company. Directors may therefore decide that only some of the suggested practices are appropriate to their circumstances. This briefing is not intended to suggest that the practices described should be adopted in their totality.

      The report is available in pdf format only.

      Click here to download a copy (1500KB).