Revised guide for CEOs/CFOs on certification of financial statements released post GFC
Tuesday, 29 June 2010 — The Group of 100 which represents the CFOs of Australia’s major enterprises and Ernst & Young have released a revised 2010 Financial Reporting Certification guide to assist Australia’s CEOs and CFOs in their sign-off of financial statements. Sign-off is a mandatory requirement under the Corporations Act from FY 2005.
The new guide reflects the greater scrutiny being applied to financial reporting by boards and audit committees following the global financial crisis, and high profile corporate failures. This latest guide highlights the changes in financial certification practices which have been developing following release of the original guide in 2007.
The National President of the G100, Peter Lewis, said the primary purpose of the joint publication was to provide a practical framework for the CEO and CFO when formulating or enhancing a process to support certifications they are required to make to a board of directors.
“Following recent court decisions regarding directors’ obligations we are now seeing directors asking more probing questions about what the certification process involves. This guide provides a pragmatic model for supporting the development of processes which underpin the certification process.”
Tony Johnson, Ernst & Young Assurance Leader, said certification of financial statements is a key feature of the governance framework of Australia and internationally.
“As well as being a highly important technical and compliance process, certification is also an exercise in change management. It is about creating and influencing the culture of an organisation, and communicating effectively.
“A core feature of the certification process is the development and application of an Internal Control Questionnaire (ICQ) to be used across an enterprise’s business units. The ICQ should be developed as an integral and ongoing element of a company’s risk management practices and not viewed as a once a year exercise.”
Ernst & Young and the G100 will undertake further revisions in the future as generally accepted practices evolve. Copies can be downloaded from the Ernst & Young and Group of 100 websites – http://www.ey.com/AU/en/Issues/IFRS and http://www.group100.com.au/
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About the Group of 100
The Group of 100 is an organisation of chief financial officers and senior finance executives from Australia's largest business enterprises whose primary purpose is to advance Australia's financial competitiveness. For more information please visit www.group100.com.au
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