The FRC Group on Audit Committees, chaired by Sir Robert Smith, was tasked with developing the guidance on audit committees in the Combined Code. The group's report, commonly referred to as the Smith Guidance or the Smith Report, was published on 20 January 2003 and codified the role of audit committees. It was subsequently revised and is now known as the FRC Guidance on Audit Committees.
The guidance
FRC Guidance on Audit Committees
The current version of the guidance published by the Financial Reporting Council (FRC) in December 2010.
Consultation
In April 2012 the FRC launched a review of the UK Corporate Governance Code and the Guidance on Audit Committees. The full text of the consultation paper, Revisions to the UK Corporate Governance Code and Guidance on Audit Committees (PDF 767kb/11 pages), and the Draft revised Guidance on Audit Committees (PDF 844kb/22 pages) are available to download from the FRC website. The consultation period closes on 13 July 2012.
Background
The establishment of the FRC Group on Audit Committees was announced in the FRC press release FRC Group on Audit Committees starts work on 12 September 2002. The terms of reference for the group were attached to the initial press release.
The original version of the guidance was entitled Audit Committees: Combined Code Guidance and was announced in the press release Sir Robert Smith launches report on Audit Committees (PN70) on 20 January 2003.
The guidance has subsequently been revised and the latest version is available from the FRC website at FRC Guidance on Audit Committees.
Useful links
Guidance for audit committees series
A series of titles published by the ICAEW in May 2003 which were aimed at helping non-executive directors understand the proposals set out in the Smith Guidance. These are available as part of the ICAEW's corporate governance research reports and briefings.
Power of Three: understanding the roles and relationships of internal and external auditors and audit committees
Guidance for members of audit committees, published by the Institute's Audit & Assurance Faculty in May 2003. The principles developed by the Faculty 'take into account the Smith report recommendations' and aim to help members of audit committees 'operate effectively alongside internal and external auditors and fulfil their responsibilities in respect of corporate governance'.
Guidance for audit committees (the Smith report)
Summary of the Smith Report published by the Audit Committee Institute (KPMG) in 2003. The toolkit on the ACI website includes a further selection of specimen checklists, documents and reports.
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