CIMA welcomes Companies Act

News Article - 10 November 2006
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The new Companies Act, which received royal assent on November 9th, has been welcomed by the Chartered Institute of Management Accountants (CIMA).

In particular, the institute has commented that it is pleased with new disclosure requirements set out in the act.

Charles Tilley, chief executive at CIMA, said: "After the turbulent changes during the past two years in respect of the legislative requirements for narrative reporting, CIMA is glad that the Trade and Industry Secretary does not envisage any further substantial changes to company law and would urge government to hold fast to the concepts which underpinned the exemplary Operating Financial Review (OFR) requirements."

The institute went on to call for any further changes to keep the flexibility and focus of the Business Review intact and expressed disappointment in the decision made by the chancellor to revoke the OFR regulation last year.

It further added that this repeal did however allow the institute to bring up the long-standing issue that directors could be held to account for forward-looking statements with the Department of Trade and Industry.

A clause within the act now states that directors are no longer liable for providing false or misleading statements in their reports unless done recklessly.

Secretary of state for trade and industry Alistair Darling said: "This act will help ensure Britain remains one of the best places in the world to set up and run a business.

"We will continue to work closely with interested parties in implementing the act."

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