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Preface


Theroleofthefinancedirectorvariessignificantlybetweencompanies,depend-
ingtoalargeextentonthecomplexityandsizeofthebusinessandthenumber
of executives and managers availableto shareintheresponsibilities. Whilst some
finance directors will concentrate primarily on financial reporting, treasury and tax-
ation issues, others will have a much wider remit and be expected to provide exper-
tise and assistance in a variety of areas.
Thefieldoffinancialreportingisbecomingincreasinglycomplex,particu-
larlyforlisted companies, wherethe emphasisis nowfirmly ontransparency and
accountability.Accountingstandardshavebecomemoreconceptualinnature,
underpinned by a requirement for preparers of accounts to apply the spirit and rea-
soning behindthe detailedrequirements. Forlisted companies,therequirementto
preparegroupaccountsinaccordancewithInternationalAccountingStandards
(IASs) has created new challenges, and the Accounting Standards Board’s plans to
converge UK accounting practice withinternational requirements overthe coming
years, together with the adoption in the UK of International Standards on Auditing
(ISAs), means that all companies are likely to feel the increasing impact of interna-
tional harmonisation.
Listed companies also have significant additional reporting responsibilities under
the Combined Code and, if they are registered with the US Securities and Exchange
Commission (SEC), under the Sarbanes-Oxley Act 2002 and related SEC rules. The
current reporting requirements in respect of internal control have focused attention
ontheissueofrisk managementand, whilstthedetailedreportingrequirements
apply onlytolisted companies,thereis nevertheless muchintherelated guidance
that will be relevant to businesses of all sizes.
ThegradualimplementationoftheCompaniesAct2006between1January
2007and1 October2009alsobringsfurtherchanges,andinthedifficulttransi-
tionalphaseparticularcareisneededinidentifying whethertheoldorthenew
requirementsapply.TheaccountingandauditprovisionsoftheCompaniesAct
2006generallyapplyforaccountingperiodsbeginningonorafter6 April2008,
although some of the new requirements in respect of auditors apply to appointments
and changes in appointments made on or after 6 April 2008. The general economic
downturninlate 2008 and 2009 has createdfurther problems, withliquidityrisk,
theavailabilityoffinanceandgoingconcernissuesreceivingparticularatten-
tion. Up to date guidance on these and related issues from the Financial Reporting
Council and Auditing Practices Board is highlighted in the relevant chapters.
These are all areas in which the finance director’s input to discussions and deci-
sionsislikelyto besignificant.Itherefore make noapologyforthefactthatthe
chapters on audit, corporate governance,financialreporting andinvestorrelations
arethe most substantial sections ofthis book. However,in additionto guidancein
these key areas, this handbook is intended to provide an overview of other business
issues and activities that may fall within the remit of the finance director. The book
is intended as an initial source of advice and guidance rather than as a comprehen-
sive manual, and sources of further information are indicated where appropriate.
Thiseditionis based onlegaland otherrequirementsinforceasat 31January
2009.Inthefast movingworldoftoday,verylittlestandsstillforlongandan
indication of known or expected future developments is therefore given where appro-
priate. No reference work can be comprehensive in this complex and fast changing
environment, ortake account ofthe specific circumstances of each particular case,
and finance directors should therefore always seek appropriate professional advice.
I am particularly gratefulto Sonia McKay and Andrea Oates who have contrib-
uted the chapters on ‘Employment law’ and ‘Health and safety’ respectively, and to
the editorial team at Elsevier for their help and support.
Glynis D. Morris
Chartered Accountant