Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3 Our audit approach Overview and context of the 2016 audit Rabobank is an international financial services provider operating on the basis of cooperative principles. Rabobank operates globally in 40 countries with focus on banking in the Netherlands and food and agri financing in the Netherlands and abroad. Its operations include domestic retail banking, wholesale banking and international rural and retail banking, leasing and real estate. Rabobank is in the midst of a transformation. During 2016 Rabobank started executing its 'Strategic Framework 2016-2020'.The strategic objectives that impact the financial statements directly are focussed on balance sheet reduction and further improving financial performance. In particular, we looked at where the Executive Board made subjectivejudgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. In paragraph 'Judgements and estimates' in note 2.1 to the financial statements the company describes the areas of judgment in applying accounting policies and the key sources of estimation uncertainty. Given the significant estimation uncertainty in the impairment of loans and advances to customers, valuation of financial instruments, litigation, regulatory and client care, valuation of equity investments and restructuring related provisions we considered these to be key audit matters as set out in the key audit matter section of this report. Furthermore, we identified hedge accounting and asset and disposal portfolios as key audit matter because they require more complex judgements in the application of International Financial Reporting Standards adopted by the European Union (EU-IFRS). Lastly the continuity and reliability of information processing was identified as key audit matter since this is significant to the Bank's operational, regulatory and financial reporting processes. The group comprises of multiple components and therefore we considered our group audit scope and approach as set out in the scope of our group audit section. We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statement. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by senior management that may represent a risk of material misstatement due to fraud. We ensured that the audit teams, both at group and at component levels, collectively contain the appropriate skills and competences which are needed forthe audit of a bank. We therefore included specialists in the areas of IT, tax, real estate, hedge accounting, financial instruments, employee benefits and valuation in our team. PwC's first year as auditor of Rabobank Prior to becoming the Bank's auditor, we developed a comprehensive transition plan commencing in July 2015 to understand the connection between the Bank's strategy, the related business risks and the way they impact the Bank's financial reporting and internal controls framework. Our transition plan included amongst others: Close interaction with the previous auditor, including a process of file reviews and formal hand over procedures as prescribed by our professional standards; Active knowledge sharing and discussions with the Finance, Risk and Internal Audit functions ('Audit Rabobank') to understand their perspectives on the business and audit risks; Attendance as observers of a number of meetings between the previous auditors with senior management and the Audit Committee during the 2015 year-end financial closing process; Evaluation of key accounting positions and audit matters from prior years. Performed walkthrough procedures, to understand the design effectiveness of processes and internal controls, in the first half year of 2016 to support our knowledge and understanding at the early stage of our audit; and Introduction meetings with the European Central Bank as key regulator of the Bank. We discussed and agreed our audit plan with the Bank's Audit Committee in April 2016 and we reported status, progress and key findings from our half year review and audit process during the year. Materiality Overall materiality: EUR 135 million which represents 5% of profit before tax. Audit scope We conducted audit work in 26 components. Site visits by the Group Engagement Team were carried out to 5 countries - the Netherlands, USA, the UK, Australia and Brazil. Audit coverage: 97% of total assets, 94% of profit before tax and 94% of revenues. Key audit matters Impairment of loans and advances to customers Valuation of financial instruments Hedge accounting Valuation of equity investments Litigation, regulatory and client care Audit Implications of Rabobank's strategy execution Reliability and continuity of the information technology Muleriulily Audit svtipc 246 Rabobank Jaarverslag 2016

Rabobank Bronnenarchief

Jaarverslagen Rabobank | 2016 | | pagina 247