1. Slide 1 Risk Management and Internal Control in the EU Responses to Discussion Paper Robert Hodgkinson 25 October 2005

2. Slide 2 Risk Management and Internal Control Discussion Paper Brussels Forum EU response Member State regimes Best practice Scandals Member State responses US response

3. 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

4. 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

5. Slide 5 Sources of input FEE member bodies and accounting firms Risk management specialists and organisations Regulators and standard setters Business representatives Investors

6. 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?

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