Risk Management and Internal Control Practice - Part 3 (2)
Source : JFU
25 November 2015
Setting a Policy as the Basis for C.2.4 Disclosure Statement
This note is the second part of Part 3 on the policy and disclosure statement. It also concludes our series of notes on compliance with the new risk management and internal control requirements under the Hong Kong Listing Rule.
Acknowledgement by the board - C.2.4(c)
The board acknowledges its responsibility for the design and implementation of the Systems and reviewing their effectiveness. Nevertheless, it should be emphasized that the Systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable assurance and not absolute assurance against material misstatement or loss.
Process used to review the effectiveness of the Systems - C.2.4(d)
To facilitate proper conduction of the regular review of the Systems, a handbook has been prepared as formal documentation of the Systems, with sections for respective unit, division or process "owners".
Apart from monthly work group meetings as explained in previous papers, an annual review is conducted, comprising the following elements, in order to assess the effectiveness of the Systems:
The scope, follow-up and compliance reviews apply to financial controls, operational controls and compliance controls, under respective WG members.
Procedures and internal controls for handling and dissemination of inside information - C.2.4(e)
The board considers that all information in the following matters is regarded as potentially price sensitive inside information, the dissemination of which is subject to policies (see below) recommended per the SFC Guidelines by the Price Sensitive Inside Information Committee, as approved by the board:
The general principle for controls over the dissemination of such information internally is "on a need to know" basis. Dissemination of such information externally is only permitted to the extent that the board has explicitly approved it for release by specified personnel and on specified channels.
The following is an overview of the PSI policy statements approved by the board:
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