ICAEW Issues Draft Guidance
The ICAEW has published a draft guidance on assurance reporting today.
The draft guidance published by the ICAEW is meant to provide assistance to reporting accountants by providing an opinion on the voting processes and the engagement of institutional investors.
The move by the ICAEW follows the Financial Reporting Council publishing its UK Stewardship Code. It is based on the concept of ‘comply or explain’. The publication came out in the month of July this year.
The ICAEW’s draft guidance has been designed to help those people who represent the interests of the end-investors. Their aim is obtaining independent assurance on their engagement and voting processes. The draft guidance is also expected to help out the principals who are engaged in the procedure.
The draft guidance has focused on those aspects of the UK Stewardship Code which are considered to be ‘objectively verifiable’. These include voting activities and practices.
The guidance will also provide reporting accountants with a framework for preparing an assurance opinion and report.
Martyn Jones, who is the Chairman of the Stakeholder Panel, said in a statement to the media that as the country is entering into the season of corporate reporting, the ICAEW draft guidance is the first instance of the fact that institutional investors will be providing assurance to the end-investors on how they should comply with the UK Stewardship Code.
Jones said that assurance with the Code was a necessity “not just in the context of adoption of the code itself but more importantly, in helping rebuild confidence and trust.”
The ICAEW draft guidance had been prepared after consultations with a stakeholder panel were conducted. The panel involved the Investment Management Association, National Association of Pension Funds and institutional investors as well.
The draft guidance is available on the ICAEW’s official website.