Barclays 2007 Annual Report Download - page 161

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Governance
Corporate governance
Accountability and audit
Barclays PLC Annual Report 2007 159
Going concern
The Directors confirm they are satisfied that the Company and the Group
have adequate resources to continue in business for the foreseeable
future. For this reason, they continue to adopt the ‘going concern’ basis
for preparing the accounts.
Internal control
The Directors have responsibility for ensuring that management maintain
an effective system of internal control and for reviewing its effectiveness.
Such a system is designed to manage rather than eliminate the risk of
failure to achieve business objectives, and can only provide reasonable
and not absolute assurance against material misstatement or loss.
Throughout the year ended 31st December 2007, and to date, the Group
has operated a system of internal control which provides reasonable
assurance of effective and efficient operations covering all controls,
including financial and operational controls and compliance with laws
and regulations. Processes are in place for identifying, evaluating and
managing the significant risks facing the Group in accordance with the
guidance ‘Internal Control: Guidance for Directors on the Combined Code’
published by the Financial Reporting Council. The Board regularly reviews
these processes through the Board Committees.
The Directors review the effectiveness of the system of internal control
semi-annually. An internal control compliance certification process
is conducted throughout the Group in support of this review. The
effectiveness of controls is periodically reviewed within the business areas.
Regular reports are made to the Board Audit Committee by management,
Internal Audit and the compliance and legal functions covering particularly
financial controls, compliance and operational controls. The Board Audit
Committee monitors resolution of any identified control issues of Group
level significance through to a satisfactory conclusion.
The Group Internal Control and Assurance Framework (GICAF) describes
the Group’s approach to internal control and details Group policies and
processes. The GICAF is reviewed and approved on behalf of the Group
Chief Executive by the Group Governance and Control Committee.
Quarterly risk reports are made to the Board covering risks of Group
significance including credit risk, market risk and operational risk,
including legal and compliance risk. Reports covering risk measurement
standards and risk appetite are made to the Board Risk Committee.
Further details of risk management procedures are given in the Risk
management section on pages 80 to 112.
Management’s report on internal control over financial reporting
The management of Barclays PLC is responsible for establishing and
maintaining adequate internal control over financial reporting. Barclays
PLC’s internal control over financial reporting is a process designed under
the supervision of Barclays PLC’s principal executive and principal financial
officers to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
reporting purposes in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and published by
the International Accounting Standards Board.
Barclays PLC’s internal control over financial reporting includes policies and
procedures that pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and dispositions of assets;
provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with IFRSs and
that receipts and expenditures are being made only in accordance with
authorisations of management and the Directors of Barclays PLC; and
provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use or disposition of Barclays PLC’s assets that
could have a material effect on Barclays PLC’s financial statements.
Internal control systems, no matter how well designed, have inherent
limitations and may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that internal controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Management has assessed the effectiveness of Barclays PLC’s internal
control over financial reporting as of 31st December 2007. In making
its assessment, management has utilised the criteria set forth by the
Committee of Sponsoring Organisations of the Treadway Commission in
Internal Control – Integrated Framework. Management concluded that
based on its assessment, Barclays PLC’s internal control over financial
reporting was effective as of 31st December 2007.
The system of internal financial and operational controls is also subject
to regulatory oversight in the United Kingdom and overseas. Further
information on supervision by the financial services regulators is provided
under Supervision and Regulation in the Risk management section on
page 126.
Statement of Directors’ responsibilities for accounts
The following statement, which should be read in conjunction with the
Auditors’ report set out on page 163, is made with a view to distinguishing
for shareholders the respective responsibilities of the Directors and of the
auditors in relation to the accounts.
The Directors are required by the Companies Act 1985 to prepare accounts
for each financial year and, with regards to Group accounts, in accordance
with Article 4 of the IAS Regulation. The Directors have prepared individual
accounts in accordance with IFRSs as adopted by the European Union.
The accounts are required by law and IFRSs to present fairly the financial
position of the Company and the Group and the performance for that
period; the Companies Act 1985 provides, in relation to such accounts,
that references in the relevant part of the law to accounts giving a true
and fair view are references, to their achieving fair presentation.
The Directors consider that, in preparing the accounts on pages 165 to
265, and the additional information contained on pages 266 to 289, the
Group has used appropriate accounting policies, supported by reasonable
judgements and estimates, and that all accounting standards which they
consider to be applicable have been followed.
The Directors have responsibility for ensuring that the Company and the
Group keep accounting records which disclose with reasonable accuracy
the financial position of the Company and the Group and which enable
them to ensure that the accounts comply with the Companies Act 1985.