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 Page 11 of 17

Rabobank Bronnenarchief

Annual Reports Rabobank | 2018 | | pagina 253