Bank of Montreal 2010 Annual Report Download - page 76

MANAGEMENT’S DISCUSSION AND ANALYSIS
MD&A
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 Chief Financial Officer (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 at October 31,
2010 by BMO Financial Group’s management under the supervision
of the CEO and the CFO. Based on this evaluation, the CEO and the CFO
have concluded that, as at October 31, 2010, 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.
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
generally 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 by management
and directors of BMO; and provide reasonable assurance regarding
prevention or timely detection of the 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 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 control over
financial reporting was effective as of October 31, 2010.
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 111.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting
in fiscal 2010 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
Shareholders’ Auditors’ Services and Fees
Pre-Approval Policies and Procedures
As part of BMO Financial Group’s corporate governance practices,
the Board of Directors 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, 2010 and 2009 were as follows:
Fees ($ millions) (1) 2010 2009
Audit fees 12.4 12.0
Audit-related fees (2) 0.7 0.2
Tax fees – –
All other fees (3) – 0.2
Total 13.1 12.4
(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 2010 and 2009 relate to fees paid for accounting advice, specified
procedures on our Proxy Circular and other specified procedures.
(3) All other fees for 2010 and 2009 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 2010 and
2009 were translation services.
74 BMO Financial Group 193rd Annual Report 2010