Barclays 2010 Annual Report Download - page 82

Risk management
Risk factors continued
Principal Risk Factor Principal Risk Management Key Specific Risks and Mitigation
12. Financial Reporting Risk
Financial Reporting Risk arises
from a failure or inability to
comply fully with the laws,
regulations or codes in relation
to the disclosure of financial
information. Non-compliance
could lead to fines, public
reprimands, damage to
reputation, enforced suspension
of operations or, in extreme
cases, withdrawal of
authorisations to operate.
Group wide requirements and any material
external requirements are set out in the Financial
Reporting Risk Control Framework.
During 2010 a review of the Financial Reporting
Risk was undertaken, resulting in a broadening
of its scope. The Group monitoring process was
also strengthened to provide the Group Financial
Controller with a more effective oversight.
All business units and Group centre functions
are required to comply with the Risk Control
Framework requirements and retain evidence
to support this accordingly. Compliance with the
Financial Reporting Risk policies is reported at
Group level through core key indicators on at least
a quarterly basis. Group oversight is undertaken
via conformance review, other ongoing monitoring
activities and quarterly review meetings are held
between the Group Financial Controller and
business unit Finance Directors to review and
challenge the business unit Financial Reporting
Risk status and assessment.
Quarterly Financial Reporting Risk reports are
submitted to the Group Operating Committee
for oversight and monitoring. Additionally, specific
reports are submitted to the Group Governance
& Control Committee and to the Board Audit
Committee around the Group compliance with
Sarbanes Oxley requirements.
Changes in accounting standards
As set out in Future Accounting Developments on page
205, the International Accounting Standards Board is
undertaking a significant programme of revision to IFRS
which it aims to complete by 30th June 2011. The final
form of IFRS requirements, the time period over which
new requirements will need to be applied and the impact
on the results and financial position is not yet known.
The Group is taking steps to ensure that it is able to
appropriately respond to the changes as they emerge,
however, the situation is evolving rapidly.
Increased scrutiny
Following the financial crisis, the financial reporting of
banks has been subject to greater scrutiny by regulators.
This has included consideration of accounting policies,
accounting for particular transactions and financial
statement disclosures.
For Barclays, this has included the accounting treatment
of Protium Finance LP. Further details are provided on
pages 115 and 116.
The Group continues to maintain an effective system
of internal control over financial reporting and to enhance
its disclosures in response to feedback received and
the British Bankers Association (BBA) Disclosure Code.
Further details on internal control over financial reporting
can be found on page 147 and on the BBA code and
improvements to Annual Report disclosures on page 184.
80 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10