pwc
About this Chairman's Corporate Consolidated Financial Company Financial
Report Foreword Management Report Appendices Governance Statements Statements
Key audit matter
Litigation, regulatory and client care
exposures
Refer to note 2.23 'Provisions', note 4.10 'Legal and
arbitration proceedings' and note 26 'Provisions'.
Completeness of identification of emerging
compliance or litigation areas
There is an industry risk that emerging compliance or
litigation areas have not been identified and or
addressed by management for financial statement
purposes. This includes the consideration whether
there is a need for the recognition of a provision or a
contingent liability disclosure on the future outcome of
legal or regulatory processes.
In line with Standard 250 we made in our audit
approach a distinction between those laws and
regulations which:
Have a direct effect on the determination of
material amounts and disclosures in the financial
statements. For this category we believe that we
obtained sufficient audit evidence regarding
compliance with the provision of those laws and
regulations; and
Not have a direct effect on the determination of
material amounts and disclosures in the financial
statement, but where compliance may be
fundamental to the operating aspect of the
business, to the Bank's ability to continue its
business or to avoid material penalties. For this
category, we performed specific procedures to
identify non-compliance with those laws and
regulations that may have a material effect on the
financial statements.
We identified that the risk of non-compliance with
laws and regulates relates mainly to the laws and
regulations which have an indirect impact on the
financial statements, such as Anti-Money Laundering
and Anti-Terrorist Financing Act (Wwft), inclusive of
global regulations on Anti-Money Laundering (AML),
Client Due Diligence (CDD) and Compliance, and
Market Abuse Regulation.
Our audit work and observations
General
We obtained an understanding of the significant laws
and regulations with which the entity has to comply and
how the entity is instituting and operating appropriate
systems of internal control to comply with those laws
and regulations by inquiry of management and designed
procedures to confirm that the Bank has appropriate
processes over:
Developing, publicizing and following a code of
conduct, including ensuring employees are properly
trained and understand the code of conduct and
monitoring compliance with the code of conduct
and acting appropriately to discipline employees
who fail to comply with it;
Engaging legal advisors to assist in monitoring legal
requirements;
Assigning appropriate responsibilities to the
internal audit function, audit committee and
compliance function; and
Instituting and operating appropriate systems of
internal control.
Control design and operating effectiveness
We understood, evaluated and tested the design and
operating effectiveness of controls of the Bank to
identify litigation and regulatory exposures within the
group. We determined that we could place reliance on
these controls for the purpose of our audit.
Specific procedures
We met with different members of the Managing Board
on a regular basis to understand the emerging and
potential exposures that they identified. We challenged
management's view on these exposures based upon our
knowledge and experience of emerging industry trends
and the regulatory environment.
To identify potential regulatory investigations that could
lead to the need for potential new provisions or
disclosures in the financial statements we read the
Bank's relevant correspondence with the Autoriteit
Financiële Markten ("AFM"), De Nederlandse Bank
("DNB") and European Central Bank ("ECB"). We met
on a trilateral and bilateral basis with the joint
supervisory team of DNB and ECB during the year.
We read the minutes of the Managing Board and the
Supervisory Board meetings and attended all Risk- and
Audit committee meetings throughout the year.
Coöperatieve Rabobank UA. - EH44X5NCPJUJ-1288894667-935
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