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European Affairs: Country by country reporting – working breakfast report

Capture COVER CbCR reportFERMA and the European Confederation of Institutes of Internal Auditing (ECIIA) held a joint working breakfast in the European Parliament on 28 June on the theme of “Country-by-Country Reporting: From Risks to Opportunities”. It focused on the corporate governance implications of the European Commission’s proposal of 12 April and the
roles played by the risk manager and the internal auditor in this field.

Danish MEP Jeppe Kofod hosted the event and Jean-Philippe Rabine, European Commission DG FISMA (Accounting and Reporting Unit) introduced the new
financial and corporate tax reporting requirements that are intended to apply to all large multinationals for every EU country they operate.

Participants in the panel discussion, moderated by Jeppe Kofod, included for FERMA Jonathan Blackhurst, Head of Risk Management at Capita (UK); Silvio de Girolamo, Chief Audit Executive Autogrill (Italy) on behalf of ECIIA; and Jean-Philippe
Rabine.

The panel said that the proposal goes further than any previous initiative with the obligation for all companies operating in the EU with a minimum turnover of €750 million in a given year to publicly disclose financial and tax information on a country-by-country basis.
About 6000 large companies will face the challenge of complying with the regulation and determining how the public will react to the tax figures they reveal – a regulatory and reputational risk.

Country-by-country reporting, therefore, is not only about the numbers, but also about how well they are delivered with the right processes and the right report. Here stands the added value of risk managers, making sure that the figures have a context so that
people understand the full extent of the firm’s value chain.

In this context, companies could use country-by country reporting as an opportunity to increase public confidence by presenting themselves to the public in an open and transparent manner. The public perception of corporate conduct is especially
important, and to mitigate the risk of scrutiny, companies will need to ask themselves: are we doing enough – and how can we turn this into an opportunity?

The text of the regulation is currently in discussion at the European Parliament and will be discussed early July by the European Council under the new Slovak EU Presidency.

Full report is available here.


Report available: Corporate Transparency – Working Breakfast at the European Parliament on 28 June

Click above to read the report

JOINT PRESS RELEASE FERMA ECIIA

Successful response to the European Commission’s proposal on country-by-country reporting requires a strong partnership between audit and risk management

Jonathan Blackhurst, Head of Risk Management at Capita (UK)

Jonathan Blackhurst, Head of Risk Management at Capita (UK)

Internal auditors and risk managers have a key role to play in ensuring that future financial transparency standards are well understood, embedded into the strategy of large corporations and become a source of competitive advantage, the European Confederation of Institutes of Internal Auditing (ECIIA) and Federation of European Risk Management Associations (FERMA) stated after a breakfast meeting today at the European Parliament.

MEP Jeppe Kofod hosted the meeting on the proposal published on 12 April 2016 by the European Commission to extend country-by-country financial reporting to most multinational groups operating in the EU.

On behalf of FERMA, Jonathan Blackhurst, Head of Risk Management at Capita (UK) said:
“Country-by-country reporting will result in the publication of a large amount of highly technical information. While this is the responsibility of CFOs, risk managers have a strategic advisory role to play in ensuring that the figures are put into the context so they show where economic value is created along the whole company’s external and internal supply-chain.”

Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy)

Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy)

On behalf of ECIIA, Silvio de Girolamo, Chief Audit Executive at Autogrill (Italy), said:
“Internal audit can contribute to the quality of transparency by giving assurance on corporate culture, on the risks and on company processes that generate figures and information for country-by-country reporting. This is useful not only for compliance matters but also to promote confidence between corporations and all stakeholders.”

FERMA and ECIIA believe that a strong three-way partnership between the Chief Financial Officer, Chief Audit Executive and Chief Risk Officer is essential to support good governance, sustainable growth, sound investments and job creation:

“Increased corporate transparency is pushing large corporations to adapt their internal organisation to new models, with both risk management and internal audit professions at the forefront of this evolution,” according to Typhaine Beaupérin, FERMA CEO.

“Because these new requirements mean a new collective responsibility for ensuring compliance with the reporting obligations, the board and senior management will need to rely on professionals to adjust and possibly turn corporate transparency into a competitive advantage globally.”, stressed Pascale Vandenbussche, ECIIA Secretary General.

 

 

Press contacts:

FERMA media coordinator

Lee Coppack

lee@coppack.co.uk

Tel: +44 (0) 208 318 0330

+44 (0) 7843 089904