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Approval of Financial Statements

Approval of Financial Statements. Shareholders Boards Audit Committee. Bert Vos Russian Corporate Governance Roundtable Meeting 11-12 November 2004. The Decision Pyramid. Russian Corporate Governance Roundtable Meeting 11-12 November 2004. Lesser Transparency.

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Approval of Financial Statements

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  1. Approval of Financial Statements Shareholders Boards Audit Committee Bert Vos Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  2. The Decision Pyramid Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  3. Lesser Transparency Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  4. The Challenge Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  5. Best Practice - Basel II: Vision; necessity underlined by Herstatt, Metallgesellschaft, WorldCom, Enron, Ahold, etc. Assumes integrated Management Information Systems Willingness to share Information Practice: Transition Markets Systems Developing Legislators and Regulators struggling GIGO.Does the decision maker have sufficient reliable information? Status Quo Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  6. Knowledge of business, of risk appetite, and of competitor’s market position Assessment of Strategy Understanding of Accounting issues Availability of information Independence of Board Approval of Financial Statements Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  7. (Management) Board and senior management oversight; Sound capital assessment; Comprehensive assessment of risks; Monitoring and reporting; Internal control review; Compliance Control Adopted from Basel II recommendations: §727- 745 Basis for Decision making: Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  8. EFFECTIVE SUPERVISION IS THE KEY Financial Stability Institute (FSI)

  9. Enforcement and Training Re: Recommendation 9, 15-20, 25 Supervisors have different powers available to them to achieve disclosure requirements • Regulators Returns definition should make Returns authoritative information supporting decision on accounting issues. • Boards should get trained • (risk assessment, implications of guidelines) Russian Corporate Governance Roundtable Meeting 11-12 November 2004

  10. Comfort to make DecisionRe: Recommendation 24 • Standardisation of Management Reports • Implement consistent Risk Management Reporting • Reasonableness Check of Management Accounts • Access to Additional Information, Accounts and Staff • Functioning Internal Control • And, to cross verify: • Less Returns but with better Information Russian Corporate Governance Roundtable Meeting 11-12 November 2004

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