On 18 September 2014, the FRC published its final Guidance on Risk Management and Internal Control and Related Financial and Business Reporting (following a consultation which was published on 08 November 2013).

This new guidance replaces the Turnbull Guidance (Internal Control: Revised Guidance on the Combined Code issued in 2005) and the FRC’s guidance on going concern (“Going concern and liquidity risk: Guidance for Directors of UK Companies 2009”).

The guidance arises as a result of

(1) recommendations in the final report published by the Sharman Panel on 13 July 2012, following its inquiry into going concern and liquidity risk reporting; and

(2) discussions held by the FRC in 2011 with company directors, investors and advisers which considered how companies were responding to the Principle in the UK Corporate Governance Code which states that boards are responsible for determining the nature and extent of the significant risks they are willing to take to achieve their strategic objectives.

The new guidance applies to reporting periods beginning on or after 01 October 2014.

On the same date, the FRC also published a new guidance note for Banks on Solvency and Liquidity Risk Management and the Going Concern Basis of Accounting, which provides supplementary considerations for the banking sector and should be read in conjunction with the Risk Management Guidance.

FRC Risk Management Guidance: http://bit.ly/1BzrFYE