TD Bank 2010 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2010 TD Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

TD BANK GROUP ANNUAL REPORT 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS 83
the effectiveness of the Bank’s internal control over financial reporting.
Based on this assessment, except as outlined in the “Limitation on Scope
of Design” below, management has concluded that as at October 31,
2010, the Bank’s internal control over financial reporting was effective
based on the applicable criteria. The effectiveness of the Bank’s internal
control over financial reporting has been audited by the independent
auditors, Ernst & Young LLP, a registered public accounting firm that
has also audited the Consolidated Financial Statements of the Bank as
of and for the year ended October 31, 2010. Their report, on page 84
of the Consolidated Financial Statements expresses an unqualified
opinion on the effectiveness of the Bank’s internal control over financial
reporting as of October 31, 2010.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the year and quarter ended October 31, 2010, there have been
no changes in the Bank’s policies and procedures and other processes
that comprise its internal control over financial reporting, that have
materially affected, or are reasonably likely to materially affect, the
Bank’s internal control over financial reporting.
LIMITATION ON SCOPE OF DESIGN
Management has limited the scope of the design of the Bank’s disclosure
controls and procedures (DC&P) and internal control over financial
reporting (ICFR) to exclude the controls, policies and procedures of The
South Financial Group, Inc., the results of which are included in the
2010 Consolidated Financial Statements of the Bank since the acquisi-
tion date of September 30, 2010. The scope limitation is in accordance
with Canadian and U.S. securities laws, which allow an issuer to limit
its design of DC&P (in the case of Canadian securities laws) and ICFR
to exclude the controls, policies and procedures of a company acquired
not more than 365 days before the end of the financial period to which
the certificate relates. The South Financial Group, Inc. constituted 1.6%
of the total consolidated assets and less than 1% of the total consoli-
dated net income for the year ended October 31, 2010. Additional
information relating to The South Financial Group, Inc. is provided in
the “Significant Events in 2010” section.
ACCOUNTING STANDARDS AND POLICIES
Controls and Procedures
DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was performed under the supervision and with the
participation of the Bank’s management, including the Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the Bank’s
disclosure controls and procedures, as defined in the rules of the SEC
and Canadian Securities Administrators, as of October 31, 2010. Based
on that evaluation, except as outlined in the “Limitation on Scope of
Design” below, the Bank’s management, including the Chief Executive
Officer and Chief Financial Officer, concluded that the Bank’s disclo-
sure controls and procedures were effective as of October 31, 2010.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The Bank’s management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Bank. The
Bank’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records, that,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Bank; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Bank are being
made only in accordance with authorizations of the Bank’s manage-
ment and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of the Bank’s assets that could have a material effect on
the financial statements.
The Bank’s management has used the criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsor-
ing Organizations of the Treadway Commission to assess, with the
participation of the Chief Executive Officer and Chief Financial Officer,