Bank of Montreal 2015 Annual Report Download - page 72

MD&A
Shareholders’ Auditors’ Services and Fees
Review of Shareholders’ Auditors
The Audit and Conduct Review Committee (ACRC) is responsible for the appointment, compensation and oversight of the shareholders’ auditors and
conducts an annual assessment of the shareholders’ auditors’ performance and effectiveness considering factors such as: (i) the quality of services
provided by the shareholders’ auditors’ engagement team during the audit period; (ii) the relevant qualifications, experience and geographical reach
to serve BMO; (iii) the quality of communications received from the shareholders’ auditors; and (iv) the shareholders’ auditors’ independence,
objectivity and professional skepticism.
The Board believes that it has robust review processes in place to monitor audit quality and oversee the work of the shareholders’ auditors,
including the lead partner, which include:
‰annually reviewing the shareholders’ auditors’ audit plan, including a consideration of the impact of business risks on the audit plan and an
assessment of the reasonableness of the audit fee;
‰monitoring the execution of the audit plan, with emphasis on the more complex and risky areas of the audit;
‰reviewing and evaluating the audit findings, including in camera sessions;
‰evaluating audit quality and performance, including recent Canadian Public Accountability Board and Public Company Accounting Oversight Board
inspection reports on the shareholders’ auditors and their peer firms;
‰reviewing qualifications of their senior engagement team members with the shareholders’ auditors;
‰soliciting the opinion of the bank’s management and internal auditors on the performance of the engagement team; and
‰at a minimum, holding quarterly meetings with the ACRC Chair and the lead audit partner to discuss audit issues independently of management.
In 2015, we completed our periodic comprehensive review of the shareholders’ auditors. The comprehensive review was based on the
recommendations of the Chartered Professional Accountants of Canada and the Canadian Public Accountability Board. The review focused on (1) the
shareholders’ auditors’ independence, objectivity and professional skepticism; (2) quality of the engagement team; and (3) quality of communications
and interactions with the shareholders’ auditors. As a result of this review the ACRC was satisfied with the performance of the shareholders’ auditors.
Independence of the shareholders’ auditors is overseen by the ACRC in accordance with the bank’s Auditor Independence Policy, as outlined
below. The ACRC also ensures that the lead audit partner rotates out of that role after five consecutive years and does not return to that role for a
further five years.
Pre-Approval Policies and Procedures
As part of BMO Financial Group’s corporate governance practices, the ACRC oversees the application of BMO’s Corporate Policy limiting the services
provided by the shareholders’ auditors that are not related to their role as auditors. The ACRC pre-approves the types of services (“permitted
services”) that can be provided by the shareholders’ auditors, as well as the annual audit plan, which includes fees for specific types of services.
For permitted services that are not included in the pre-approved annual audit plan, confirmation to proceed with the engagement is obtained and the
services to be provided are presented to the ACRC for ratification at its next meeting. All services must comply with our Auditor Independence Policy,
as well as professional standards and securities regulations governing auditor independence.
Shareholders’ Auditors’ Fees
Aggregate fees paid to the Shareholders’ Auditors during the fiscal years ended October 31, 2015 and 2014 were as follows:
Fees ($ millions) (1) 2015 2014
Audit fees 17.1 17.3
Audit-related fees (2) 2.2 1.9
Tax fees 0.1 –
All other fees (3) 2.3 1.2
Total 21.7 20.4
(1) The classification of fees is based on applicable Canadian securities laws and U.S. Securities and
Exchange Commission definitions.
(2) Audit-related fees for 2015 and 2014 relate to fees paid for accounting advice, specified procedures
on our Proxy Circular and other specified procedures.
(3) All other fees for 2015 and 2014 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. They also include costs of translation services.
BMO Financial Group 198th Annual Report 2015 83