pwc
Overall group €195 million (2017: €181 million)
materiality
Basis for determining We used our professional judgement to determine overall materiality. As a basis for
materiality our judgement, we used 5% of profit before tax.
Rationale for We used profit before tax as the primary benchmark, a generally accepted auditing
benchmark applied practice, based on our analysis of the common information needs of users of the
financial statements. On this basis, we believe that profit before tax is an important
metric for the financial performance of the Bank and is widely used within the
indu stry.
Component To each component in our audit scope, we allocate, based on our judgement,
materialitg materiality that is less than our overall group materiality. The range of materiality
allocated across components was between €25.5 million and €75 million.
We also take misstatements and/or possible misstatements into account that, in our judgement, are
material for qualitative reasons. Examples of areas that we focussed on due to qualitative reasons are
the accuracy and completeness of the fair value disclosure, the disclosure around the implementation
of IFRS 9, the legal, regulatory and client care exposure and the remuneration of the Supervisory
Board and the Managing Board.
We agreed with the Supervisory Board that we would report to them misstatements identified during
our audit above €8.75 million (2017: €8.75 million) as well as misstatements below that amount that,
in our view, warranted reporting for qualitative reasons.
The scope of our group audit
Coöperatieve Rabobank U.A. is the parent company of a group of entities. The financial information of
this group is included in the consolidated financial statements of Coöperatieve Rabobank U.A.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an
opinion on the financial statements as a whole, taking into account the management structure of the
Group, the nature of operations of its components, the accounting processes and controls, and the
markets in which the components of the Group operate.
In establishing the overall group audit strategy and plan, we determined the type of work required to
be performed at the component level by the group engagement team and by each component auditor.
Rabobank has an internal audit department ('Audit Rabobank') that performs operational audits,
compliance audits, IT audits, loan (valuation) audits, culture and behaviour audits, audits on internal
control on financial reporting and financial statement audits. Audit Rabobank issued audit opinions on
the financial information of certain of the components of Rabobank (for internal purposes only) to the
Supervisory Board, Audit Committee and Managing Board. We considered, in the context of audit
standard 610 'Using the work of internal auditors', whether we could make use of the work of Audit
Rabobank and we concluded that this was appropriate. To arrive at this conclusion, we evaluated the
competence, objectivity as well as the systematic and disciplined approach applied by Audit Rabobank,
and more specific the financial audit team of Audit Rabobank. Subsequently we developed a detailed
approach and model to make use of the work of Audit Rabobank in our financial statement audit. We
were substantially and independently involved in the higher risk areas and or in areas or procedures
that require significant judgement. During the audit process we worked closely with Audit Rabobank,
had frequent status meetings and reviewed and "reperformed" some of their work which confirmed
our initial assessment and reliance approach.
Coöperatieve Rabobank UA. - EH44X5NCPJUJ-1288894667-935
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