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34 Reporting on risk management > Charities' risk reporting - Pg. 365

Reporting on Risk Management 365 market acceptance of our new service and growth initiatives; changes in customer demand patterns; the impact of technology developments on our operations; disruptions to our technology infrastructure; adverse weather conditions; if our sub-contractors' employees were considered our employees; changes in tax laws or their interpretation by authorities; higher costs related to implementation of the Sarbanes­Oxley Act; changes in environmental laws. Table 34.1 is an example of a list of risk factors, but it does not include all of the items contained in the full list filed as part of Form 20-F. Each of the above risks would usually be described in more detail, by way of a detailed explanation of up to half a page. Additionally, the Securities and Exchange Commission (SEC) is con- sidering whether to require more detailed reports on the risk committee reporting structure in companies listed on US stock exchanges. The SEC is the federal regulator of US stock exchanges and has the mission to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. Charities' risk reporting Risk reporting by charities is compulsory in most countries in the world. In general, there is an expectation that charities should have detailed risk management pro- cedures broadly equivalent to those required of government departments or of companies listed on a stock exchange. A shortened version of the advice on risk reporting set out in the UK Charity Commission guidance is as follows: The form and content of risk reporting should reflect the size and complexity of an individual charity. The Charity Commission is not seeking to standardise risk reporting. A narrative style report that addresses the key aspects will be an acceptable approach to reporting, provided that the report provides: an acknowledgement of trustees' responsibility; an overview of the risk identification process; an indication that major risks have been reviewed or assessed; confirmation that control systems have been established. It is recognized that some charities, particularly larger charities or those with more complex operations, will wish as a matter of best practice to expand on this basic approach in their reporting. Where this more detailed approach to reporting is adopted it will be desirable to address the following broad principles, describ- ing how they have been incorporated into the risk management procedures of the charity: linkage between the identification of major risk and the operational and strategic objectives of the charity;