Bank of Montreal 1998 Annual Report Download - page 98

KPMG LLP (signed) PricewaterhouseCoopers LLP (signed) Canada
Chartered Accountants Chartered Accountants November 24, 1998
The Bank’s management is responsible for presentation and prepa-
ration of the annual consolidated financial statements, Management
Analysis of Operations (“MAO”) and all other information in the
Annual Report.
The consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles,
which in our circumstances are consistent with accounting principles
generally accepted in the United States. The financial statements
also comply with the provisions of the Bank Act and related regula-
tions, including the accounting requirements of the Superintendent
of Financial Institutions Canada, as well as the requirements of the
Securities and Exchange Commission in the United States.
The MAO has been prepared in accordance with the requirements
of securities regulators including National Policy 47 of the Canadian
Securities Administrators as well as Item 303 of Regulation S-K of the
Securities Exchange Act, and their related published requirements.
The consolidated financial statements and information in the
MAO necessarily include amounts based on informed judgements
and estimates of the expected effects of current events and transac-
tions with appropriate consideration to materiality. In addition, in
preparing the financial information we must interpret the require-
ments described above, make determinations as to the relevancy of
information to be included, and make estimates and assumptions
that affect reported information. The MAO also includes informa-
tion regarding the estimated impact of current transactions and
events, sources of liquidity and capital resources, operating trends,
risks and uncertainties. Actual results in the future may differ mate-
rially from our present assessment of this information because future
events and circumstances may not occur as expected.
The financial information presented elsewhere in the Annual
Report is consistent with that in the consolidated financial statements.
To the Shareholders of Bank of Montreal
We have audited the consolidated balance sheets of Bank of Montreal
as at October 31, 1998 and 1997 and the related consolidated state-
ments of income, changes in shareholders’ equity and cash flow
for each of the years in the three-year period ended October 31,
1998. These financial statements are the responsibility of the Bank’s
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and per-
form an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes
In meeting our responsibility for the reliability of financial informa-
tion, we maintain and rely on a comprehensive system of internal con-
trol
and audit including organizational and procedural controls and
internal accounting controls. Our system of internal control includes
written communication of our policies and procedures governing
corporate conduct and risk management; comprehensive business
planning; effective segregation of duties; delegation of authority and
personal accountability; careful selection and training of personnel;
and sound and conservative accounting policies which we regularly
update. This structure ensures appropriate internal control over trans-
actions, assets and records. We also regularly audit internal controls.
These controls and audits are designed to provide us with reasonable
assurance that the financial records are reliable for preparing finan-
cial statements and other financial information, assets are safeguarded
against unauthorized use or disposition, liabilities are recognized, and
we are in compliance with all regulatory requirements. The Share-
holders’ Auditors review our system of internal control and conduct
their work to the extent that they consider appropriate in order to
provide their opinion on our consolidated financial statements.
T he Board of Directors is responsible for reviewing and approving
the financial information contained in the Annual Report, including
the MAO, and overseeing management’s responsibilities for the
presentation and preparation of financial information, maintenance
of appropriate internal controls, management and control of major
risk areas and assessment of significant and related party transactions.
The Board delegates these responsibilities to its Audit, Risk Review
and Conduct Review Committees. These committees are composed
solely of directors who are not officers or employees of the Bank.
The Shareholders’ Auditors and the Bank’s Chief Auditor have
full and free access to the Board of Directors and its committees to
discuss audit, financial reporting and related matters.
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the Bank as
at October 31, 1998 and 1997 and the results of its operations and
its cash flow for each of the years in the three-year period ended
October 31, 1998 in accordance with generally accepted accounting
principles including the accounting requirements of the Superin-
tendent of Financial Institutions Canada.
90
BANK OF MONTREAL GROUP OF COMPANIES
STATEMENT OF MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL INFORMATION
SHAREHOLDERS’ AUDITORS’ REPORT
Matthew W. Barrett (signed) F. Anthony Comper (signed) Robert B. Wells, C.A. (signed)
Chairman and President and Executive Vice-President and
Chief Executive Officer Chief Operating Officer Chief Financial Officer