Auditing

98 items, ordered by date.

1. Handwritten notes of Sir Adrian Cadbury arranged by topic and source of comment, no date

Includes coments from CBI, KPMG, IoD, CBI Committee, ICAS, and individuals. Main headings are remuneration, independent audit, information to be included in reports.

2. Comments from VW Benjamin, undated

Comments on the absence of input from business, executive remuneration, separation of roles, application of the code to smaller listed companies and various aspects of auditing. Also includes comments on specific paragraphs.

3. Manuscript notes by Sir Adrian Cadbury on back of photocopies of articles

Handwritten notes about priorities, auditing, legislation, regulation, independence etc

4. The code of best practice, undated

This would seem to be a print-out of a presentation on the code of best practice on the report of the Committee.

5. Standards of financial reporting and auditing, undated

Document concentrates on auditing and accounting standards.

6. Sir Adrian Cadbury’s handwritten notes on ‘communications with City, responsibilities and auditors

Handwritten notes from probably 3 different meetings or situations as three different papers, covering most topics of the Committee’s investigations.

7. Handwritten notes, headed Alan Sykes, Consolidated Goldfields, no date

Covers non-executive directors and external auditing.

8. Handwritten notes by Sir Adrian Cadbury, undated. Two pages are paper headed Savoy London, Banquesting – private rooms

The notes cover institutional investors, power distribution, communication with investors and more detailed notes on the role of auditors.

9. Coopers & Lybrand Deloitte paper on corporate governance and accountability, 30 January 1991

Paper summarises the issues in corporate governance and accountability, including responsibilities, current UK Legislation and EC Directives

10. Letter, dated 30 January 1991, from CB Gough to Sir Peter Gregson, Permanent Secretary, Department of Trade & Industry

The letter refers to a meeting which covered the relationship between boards of directors and auditors and the effectiveness of audit. It proposes a review of corporate governance and accountability.

11. Making corporate governance more effective, paper submitted on 1 February, 1991, to Accountancy Age

The paper briefly reviews issues in corporate governance: appointment of non-executive directors to the board and their contribution; the integrity of financial information; auditing standards and the responsibilities of auditors.

12. Note about the EC eco-audit draft regulation, prepared by Barnus Ltd, environmental consultants, sent by Ronald Somerville

Covers proposed EC Regulation on the requirement for an audit of a company’s environmental policy and performance. Includes handwritten note to Sir Adrian from Ronald Somerville

13. Handwritten notes headed ‘Questions’, undated

Notes on conduct of Annual General Meetings, auditors, directors’ remuneration.

14. In confidence. Record of meeting with Mr Nigel Macdonald, vice president of the Institute of Chartered Accountants of Scotland and partner, Ernst and Young, on 14 June 1991

Includes the terms of reference of the Working Party formed by the Institute of Chartered Accountants of Scotland to address selected issues concerning corporate governance.

15. In confidence. Note of meeting with Mr Jonathan Charkham, Bank of England on Wednesday, 19 June 1991

Contains thoughts on information disclosure, closeness of auditors to clients and Board responsibility, narrative information rather than figures, enforcement, directors’ remuneration and comments on meaning of ‘financial aspects of corporate governance’.

16. Handwritten memo, dated 20 June 1991, with extracts from the 1989 Companies Act and ICAEW’s What is an audit

Memo re-arranges meeting of 25 June 1991 with Sir Dermot de Trafford.

17. Record of meeting on 1 July 1991 with Mr Hugh Collum, 100 Group of finance directors

Collum published an article in IASC News on the diversity of accounting standards internationally. 100 Group are very interested in corporate governance and esepcially in definging the role of auditors vs directors.

18. Record of meeting with Mr Chris Swinson, partner of BDO Binder Hamlyn, on 1 July 1991

Mostly concentrates on what ICAEW’s Financial Reporting and Auditing Group (FRAG) are doing.

19. Correspondence, papers and report of a meeting with Charles Nunneley, Institutional Fund Managers’ Association, July to November 1991

Contains papers, voting by institutional Shareholders, Communication of Business Plans & Insider Dealing

20. Letter, dated 8 July 1991, with annexes from JP Charkham, Bank of England

Letter contains draft Terms of Reference for the Committee, and proposals for end product with an outline for the final report.

21. Letter, dated 11 July 1991, and final draft by Bow Group Committee paper on corporate governance

Bow Group paper contains recommendations on non-executive directors, remuneration committees, audit committees, separation of roles, training for directors and their contracts, reporting auditing and memo from Sir Adrian Cadbury.

22. Record of meeting with Mr Brandon Gough, Senior Partner of Coopers & Lybrand Deloitte, on 15 July 1991

Presents the auditor’s view. NOTE: implication that BG’s behind the scenes work had been influential in setting up Committee.

23. In confidence. Record of meeting with Professor David Tweedie, Chariman of the Accounting Standards Board, on 23 July 1991

Sets out what ASB would be happy for the Cadbury Committee to consider.

24. Letter, dated 23 July from PJ Butler, KPMG and paper, Reports on the application of acconting principles [Canada]

Paper sets out rules on professional conduct when ‘opinion shopping’ is an issue.

25. Letter from Sir Simon Hornby, WH Smith, 30 July 1991, and record of meeting with Sir Simon Hornby, 30 October 1991

The letter is a response to a request to give evidence. Areas for discussion: responsibilities of shareholders, independence of auditors, influence of analysts, information to be given in reports.The letter has a siginifcant number of handwritten comments in Sir Adrian’s hand.

26. Letter, dated 31 July 1991, from CB Gough, Coopers & Lybrand Deloitte

A contribution to the key issues for the Committee: roles of non-executive directors and shareholders; internal control systems; auditing appointments.

27. Correspondence, dated 6 August 1991, from IBC Financial Focus limited inviting Sir Adrian to speak on the role of auditors at a conference, Stockmarket in the 1990s

The invitation includes proposed conference programme.

28. First two pages of a fax, dated 18 August 1991, to Sir Adrian Cadbury with handwritten notes on the back of both pages

One page is the first page of a draft paper about the role of auditors. Both pages have Sir Adrian’s handwritten notes on the back which may refer to Committee Meeting or meeting with Mr Joll.

29. Draft, dated 21 August 1991, evaluating a company’s progress, prepared by Neville Bain, Coats Viyella

Paper prepared by Neville Bain. Not clear who is the intended audience.

30. Meeting with N. C. Bain 22/8/91

Mostly relates to auditing and accounting standards.

31. Memo and record of meeting with Mr Tony Groag, Head of Internal Audit at BP, 6 September 1991

Includes a short paper by Groag on the role of internal audit.

32. Record of meeting with Marjorie Mowlam MP, Opposition Spokeswoman on Corporate and City Affairs, on 19 September 1991

Gives the Labour position at the time.

33. Letter, 20 September 1991, to JAB Joll, and record of meeting with Mr James Joll, Finance Director of Pearson plc on 19 September, 1991

Report of meeting focuses on auditing.

34. Letter, dated 23 September 1991, from Roger Gray, CIMA and supporting evidence

This is a reply to a request for comments on financial reporting, audit committees and the responsibilities of auditors.

35. Record of lunch with Mr Donald Main, Group Finance Director of Trust House Forte, on 24 September 1991

Record focuses on role of accounting standards and auditors.

36. Record of meeting with Mr Derek Foster, recently retired technical partner of Arthur Young, on 26 September 1991

Concentrates on the role of the auditor.

37. Record of meeting on 1 October 1991, with Mr James Leek, Director of Caparo Industries plc

Concentrates on the liability of auditors and their responsibilities.

38. Memoranda to the Committee from the Financial Reporting and Auditing Group 1- giving more power to shareholders in their dealings with auditors CFACG(91)9 FRAG and 2 – the form an content of financial reporting

These documents consider the issues in detail. These documents should be with the minutes which are missing.

39. Note of meeting with Mr John Stevenson on 1 October 1991

The focus of the meeting was the independence of auditors, Mr Stevenson is the retired technical partner of Touche Ross. Sir Adrian’s handwritten notes from the meeting are attached.

40. Correspondence about co-opting Sir Christopher Hogg on to the Committee and record of meeting with him on 25 October 1991

AC Hugh Smith agreed to co-opting Sir Christopher Hogg on to the Committee. Also includes handwritten notes in preparation for or taken at the meeting with Chris Hogg.

41. Letter and submission from the Society of Investment Analysts, 29 October 1991

The submission covers the composition of the Board e.g. Separate Chairman and Chief Executive, non-executive directors; qualitative and quantitative financial reports, importance of non-executive directors, external auditors and audit committees.

42. Proposals on auditors, dated 31 October 1991

This typewritten note summarises comments on auditors by four people: Austin Mitchell, Marjorie Mowlam, James Leek and Brandon Gough.

43. Issues for the Committee’s successor body, 30 November 1994 and Sarah Brown’s response to enquiries about progress in implementing three recommendations in [the Cadbury] report

Highlights issues for a successor body, namely, research into compliance, research funding and recommended amendments to the Companies Act. Sarah Brown’s letter deals with directors’ service contracts, fees paid to audit firms for non-audit work, protection for auditors reporting fraud.

44. National Westminster Bank’s submission to the Committee on the Financial Aspects of Corporate Governance, November 1991

Submission covers the role and responsibilities of boards of directors, financial reporting, shareholders, auditing and regulation.

45. Letter from London Business School [Andrew Likierman], 20 November 1991

Letter is response to a request to comment on the role and responsibilities of auditors. Also has Sir Adrian’s handwritten notes on backs of two pages, headed respectivley Andrew Likierman and Bill Morrison.

46. Record of meeting with National Association of Pension Funds, 26 November 1991 and various documents

Includes published material written by NAPF and survey on voting issues, proposals for an expanded auditors’ report. See also CAD-01166.

47. Record of meeting with Dr GH Selim, President of the Institute of Internal Auditors, on 30 October 1991

Main topics covered: audit committees, their relationship with external auditors, reporting on internal control systems.

48. Correspondence with Austin Mitchell and Prem Sikka and their submission, December 1991, January 1992

Covers issues such as communication between boards and shareholders, emphasis on the long term, corporate reporting, company-auditor relationships, responsibilities of non-executive directors, audit committees and auditors responsibilities.

49. Record of meeting with Mr Bill Morrison, Chairman of the Auditing Practices Board, on 4 December 1991

Includes a draft work programme and an update of the draft Accounting Practices Board discussion draft.

50. Handwritten notes (17 December 1991) and letter from RJ Chapman, Arthur Andersen, 7 November 1991

Letter sets out Arthur Andersen’s views as a contribution to evidence gathering.

51. Record of meeting with Hugh Collum, 100 Group, 14 January 1992

Comments on the papers circulated for the 20-21 January 1992 meeting.

52. Price Waterhouse submission to the Cadbury Committee on Financial Aspects of Corporate Governance, 5 February 1992

Covers aspects of board of directors, internal controls, financial reporting, auditing.

53. Letter, dated 24 April 1992, from Chris Holder, Arthur Andersen covering views expressed at Cadbury Committee on Corporate Governance Dinner, 30 March 1992

The views cover the range of auditing issues, non-executive directors, responsibilities of directors, divided boards and other matters.

54. Letter, 7 July 1992, from JP Dobrowolski, Argos plc

Comments on the role of internal auditors.

55. Correspondence from Ron Dearing, Financial Reporting Council, including responses to the draft report from ICAEW, Rowena Mills Associates, Delta plc and Sears plc between 1 May 1992 and 23 July 1992

Includes comments on differentiation between executive and non-executive board members, role of auditors and non-audit fees. Memo from Nigel Peace included.

56. Revised questions and answers brief for the launch of the [draft] report, 22 May 1992

Includes 2 pp of 11 questions apparently compiled by ICAEW referring specifically to auditing and accounting aspects.

57. Report on a pilot study on attitudes toward the issues of corporate governance, a presentation by Angus Maitland, Burson-Marsteller at CBI/B-M conference on Corporate Governance 10 June 1992 and reply by Nigel Peace

Reports the results of a survey. Auditors are least likely to benefit while non-executive directors benefit most. Responsibility for compliance lies with company management and institutional shareholders or Stock Exchange, while expresses doubts over self-regulation.

58. Comments, dated 17 June 1992, by JC Dwek, Bodycote International plc, letter and reply by Nigel Peace

Comments that fraud is very difficult to prevent and comments on non-executive directors and auditing, especially their resignation advice.

59. Letter, dated 18 June 1992, Annual Report analysis from Jonathan Chaytor and FT article

Comments on institutional investors, non-executive directors and internal auditors.

60. Letter, dated 24 June 1992, from EA Bradman

Comments on voluntary nature of the code, non-executive directors, the role of audit committees, directors’ contracts and the independence of auditors.

61. Letter and comments, dated 30 June 1992, from Tim Knowles

Comments on non-executive directors, financial reporting, auditing and institutional shareholders.

62. Letter, dated 1 July 1992, from AR Threadgold, POSTEL

Comments on separation of roles of Chairman and Chief Executive, independent non-executive directors and directors service contracts and the independence of auditors.

63. Letter, dated 3 July 1992, from Dermot Glynn, NERA and presentation, dated June 1992

Includes a paper on European accounting, audit independenc and regulation.

64. Letter, 5 July 1992, from AL Hempstead

Comments on lack of audited accounts for a fund managed by the Nationwide Building Society.

65. Memo, dated 6 July 1992, and summary of audit trustee proposal by AJ Merret and Allen Sykes with comments by Price Waterhouse

Suggests appointing an ‘audit trustee’ appointed by lenders and creditors rather than the board.

66. Letter, 7 July 1992, from RJ Alexander, London and Manchester Group plc

Author suggests that an ‘Appointed Accountant’ with responsibility for preparing financial reports, should be employed.

67. Letter, 7 July 1992, and comments from TJ Grove

Comments on appearing to be written with best interests of directors, and aspects of auditing.

68. Letter, 8 July 1992, from DEF Green

Comments on independence of auditors, audit committees and non-executive directors.

69. Letter, 10 July 1992, from NC Kelleway, Rikard Keen & Co

Comments on auditing, complying with a code of best practice, non-executive directors, internal control systems and going concern recommendations.

70. Letter, 10 July 1992, from CM Stuart

Comments on non-executive directors roles, internal control systems, the role of auditors.

71. Letter, 13 July 1992, from Gerard Howe, Howe Associates

Comments on distinctions between executive and non-executive directors, compliance with the code, separation of roles and board appointments, committees, directors remuneration, auditors and other services to organisations.

72. Letter, 13 July 1992, from Sir George Russell, Marley plc

Comments on differentiation between executive and non-executive directors, access to independent advice, and communication with shareholders.

73. Letter, 14 July 1992, from JBH Jackson

Comments from his perspective of ‘professional chairman’ and strongly in favour of unitary boards.

74. Letter, 16 July 1992, from Gary Allen, IMI plc

Comments on responsibilities of directors and potential for two-tier boards, non-executive directors, access to independent advice and the role of the auditors.

75. Letter, 20 July 1992, from David Fifield

Comments on ownership models, accountancy work, short-termism.

76. CBI response to the Cadbury Committee draft report on the financial aspects of corporate governance, PC 27 92, 20 July 1992

Comments in detail on sections of the draft report, approving the self regulation approach, questioning statements of compliance requirement, commenting on the role of non-executive directors, remuneration, auditing and shareholders’ role.

77. Letter, 21 July 1992, from Paul Girolami, Glaxo

Comments on directors and non-executive directors roles, auditors and Code of Best Practice.

78. Letter and comments, dated 23 July 1992, from Blenyth Jenkins, the Institute of Directors

Comments in the context of the wider context of corporate governance, while focussing on internal control, self-regulation and enforcement, interim financial reporting and auditing.

79. Comments, dated 23 July 1992, from the Chartered Institute of Management Accountants

Comments on the separation of roles, non-executive directors , internal control systems, audit and remuneration committees and various aspects of auditing.

80. Comments, dated 24 July 1992, from Catherine Gowthorpe, Lancashire Polytechnic Business School

Comments at length on non-executive directors – the qualities required, their financial interests and selection. Also includes comments on the board and in detail on aspects of auditing.

81. Letter and report, dated 24 July 1992, from the Institute of Internal Auditors

Comments on codes for standards of conduct, the role of internal auditors and an auditing committee, fraud and compliance with the code.

82. Letter, dated 28 July 1992, from Serious Fraud Office

Comments on auditors’ statutory protection and the role of non-executive directors.

83. Letter, dated 28 July 1992, from McKenna & Co

Letter covers enforcement of the code, the role of non-executive directors, separation of the roles of Chief Executive and Chairman, shareholders’ role and that of the auditors with respect to fraud.

84. Letter, dated 30 July 1992, from JD Traynor, CRH plc

Expresses concerns about emphasis on control and monitoring, and the influence of accountants and auditors. It continues to make specific points.

85. Correspondence, dated June and July 1992, from RHF Croft, Jeremy Orme, both of SIB and accompanying letter and document on auditing

These documents concentrate on auditing and its role in investment businesses. The Board supports the Auditing Practices Board, believing its primary function is to form and express an opinion.

86. Letter, dated 31 July 1992, from Sir Richard Greenbury

Letter comments on board structure, especially unitary boards, the duties of directors to shareholders and the responsibilities of the external auditors.

87. Letter, dated 4 August 1992, from Bill Morrison, Auditing Practices Board

Comments on the practicality of auditors commenting on corporate governance compliance while proposing an alternative method and also comments on interim reporting.

88. Letter from Financial Reporting Council, dated 6 August 1992, and extract re non-executive director, and Arthur Andersen’s Audit committees for the 1990s

Covers the role of institutional shareholders, auditors and non-executive directors.

89. Fax, dated 19 August [1992], from Sir Adrian Cadbury to Nigel Peace, about wording of 5.34, clipped to letter from MJ Harding, Ernst & Young, dated 3 August 1994

Asks Nigel Peace’s opinion of alternative working for para 5.34. This may have been prompted by comments on the draft report from among others Ernst & Young as it is clipped to a letter saying they may have been wrong in their criticisms.

90. Meeting on 17 September 1992, Committee’s conclusions on proposed revision to draft report

Covers all sections of the report with suggested replacement wording.

91. Letter, dated 2 July 1993, from Robert Charlesworth, including guidance on how auditors handle a statement of compliance with the Code of Best Practice and review interim reports

There is draft guidance on compliance with the Code of Best Practice and also guidance on the topic issued in December 1993. In July 1993 the APB issued a draft for comment on reviewing interim financial information.

92. Letter, dated 25 October 1993, from Howard Davies and paper (C 66 93)on financial reporting and governance, endorsed by the CBI Council

The paper sets out the many recent reforms in financial reporting and auditing practices. It supports the Cadbury proposals but calls for more coordination and consistency between the various bodies with a role in financial reporting and auditing.

93. Letter, dated 23 February 1994, from Dermot de Trafford, Institute of Directors

Comments on the recent Auditing Practices Board exposure drafts and too warmly welcoming them.

94. Letter, dated 19 October 1994, from Mr Gillum about audit committees

Recounts a case history of auditing and proposes a solution.

95. Chairman’s brief for the meeting on Wednesday 8(sic) December 1994, agenda for the meeting and minutes of the meeting held on Wednesday 7 December 1994

Deals with internal control systems, issues for the successor body, monitoring compliance [with the Code] and various aspects handled by the Monitoring Sub-committee. Also includes letter from DTI on length of directors’ service contracts, disclosure of no-audit fees paid to firms, protection for auditors reporting fraud. A note sets out proposed amendment to minutes of meeting held on 14 September, 1994.

96. Letter and comments, dated 27 July 1992, from Donald B Butcher, representing the UK Shareholders’ Association

Comments on and suggests approaches on various aspects of AGMs, creating two classes of non-executive directors. Butcher supports rotation of auditors.

97. Letter, dated 12 November 1992, from Beharrell, Thompson

Raises SEC approach to corporate governance, compliance with Code of Best practice, auditors and the cost of compliance. It includes the documents from the SEC about executive compensation.

98. Letter, dated 30 July 1991, from Sir Simon Hornby about giving evidence to the Committee

Lists the headings which Sir Simon Hornby would discuss.