Bank of Montreal 2008 Annual Report Download - page 76

MANAGEMENT’S DISCUSSION AND ANALYSIS
MD&A
72 | BMO Financial Group 191st Annual Report 2008
Pre-Approval of Shareholders’ Auditors’ Services and Fees
Pre-approval Policies and Procedures
As part of BMO Financial Group’s corporate governance practices, the
Board ensures the strict application of BMO’s corporate policy limiting
the services provided by the Shareholders’ Auditors that are not related
to their role as auditors. All services provided by the Shareholders’
Auditors are pre-approved by the Audit Committee as they arise,
or through an annual pre-approval of amounts for specific types of
services. All services comply with our Auditor Independence Policy,
as well as professional standards and securities regulations
governing auditor independence.
Shareholders’ Auditors’ Service Fees
Aggregate fees paid to the Shareholders’ Auditors during the fiscal
years ended October 31, 2008 and 2007 were as follows:
Fees ($ millions) (1) 2008 2007
Audit fees 11.6 12.0
Audit-related fees (2) 0.1 0.1
Tax fees ––
All other fees (3) 0.1 0.1
Total 11.8 12.2
(1) The classification of fees is based on applicable Canadian securities laws and United States
Securities and Exchange Commission definitions.
(2) Audit-related fees for 2008 relate to fees paid for accounting advice, specified procedures
on our Proxy Circular and other specified procedures. Audit-related fees for 2007 relate to
fees paid for accounting advice and specified procedures on the Proxy Circular.
(3) All other fees for 2008 and 2007 relate primarily to fees paid for reviews of compliance
with regulatory requirements for financial information and reports on internal controls over
services provided by various BMO Financial Group businesses. Also included in 2008 were
corporate recovery services grandfathered under BMO’s Auditor Independence Policy.
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported
to senior management, including the President & Chief Executive
Officer (CEO) and the Interim Chief Financial Officer (Interim CFO), on
a timely basis so that appropriate decisions can be made regarding
public disclosure.
An evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures was conducted as of
October 31, 2008 by BMO Financial Group’s management under the
supervision of the CEO and the Interim CFO. Based on this evaluation,
the CEO and the Interim CFO have concluded that, as of October 31,
2008, our disclosure controls and procedures, as defined in Canada by
National Instrument 52-109, Certification of Disclosure in Issuers’ Annual
and Interim Filings, and in the United States by Rule 13a-15(e) under
the Securities Exchange Act of 1934 (the Exchange Act), are effective to
ensure that information required to be disclosed in reports that we file
or submit under Canadian securities legislation and the Exchange Act is
recorded, processed, summarized and reported within the time periods
specified therein.
Internal Control over Financial Reporting
Internal control over financial reporting is designed to provide reason-
able assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with Canadian gener-
ally accepted accounting principles and the requirements of the
Securities and Exchange Commission in the United States, as applicable.
Management is responsible for establishing and maintaining adequate
internal control over financial reporting for BMO Financial Group.
BMO’s internal control over financial reporting includes policies and
procedures that: pertain to the maintenance of records that, in reason-
able detail, accurately and fairly reflect the transactions and dispositions
of the assets of BMO; provide reasonable assurance that transactions are
recorded as necessary to permit preparation of the financial statements
in accordance with Canadian generally accepted accounting principles
and the requirements of the Securities and Exchange Commission in the
United States, as applicable, and that receipts and expenditures of BMO
are being made only in accordance with authorizations of management
and directors of BMO; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of BMO’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial
reporting can provide only reasonable assurance and may not prevent
or detect misstatements. Furthermore, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
BMO Financial Group’s management, under the supervision of
the CEO and the Interim CFO, has evaluated the effectiveness of our
internal control over financial reporting using the framework and criteria
established in Internal Control –Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, management has concluded that internal con-
trol over financial reporting was effective as of October 31, 2008.
BMO Financial Group’s auditors, KPMG LLP (Shareholders’ Auditors),
an independent registered public accounting firm, has issued an audit
report on our internal control over financial reporting. This audit report
appears on page 103.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting in
fiscal 2008 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Management’s Annual Report on Disclosure Controls and
Procedures and Internal Control over Financial Reporting