Barclays 2008 Annual Report Download - page 167

2
Governance
Fig 6: Approval of financial statements
Disclosure
Committee
– Reviews and
agrees the Group’s
disclosures to ensure
they are appropriate
and correct
– Reviews and
evaluates the
Group’s disclosure
controls and
procedures
– Reports conclusions
to Executive
Committee and
Board Audit
Committee
Board Audit
Committee
– Receives a report on
the review of Group
internal controls
– Reviews the financial
statements prior to
approval by the Board
– Reviews Disclosure
Committee
conclusions and
provides further
challenge as
necessary
Board
– Approves results
announcements
and the Annual Report
for publication and
ensures relevant
disclosures have
been made
Legal and Technical
Review Committee
– Reviews results
announcements and
the Annual Report for
technical accounting,
legal and regulatory
compliance
– Reports its
conclusions to
the Disclosure
Committee
Executive
Committee
– Reviews Disclosure
Committee conclusions
and provides further
challenge as needed
– Agrees results
announcements
and the Annual Report,
subject to Board
and Board Audit
Committee approval
– Group Chief Executive
Officer and Group
Finance Director
take opportunity to
challenge Executive
Committee members
››››
Barclays PLC Annual Report 2008 165
Non-Audit Services Policy
The Committee takes seriously its responsibility to put in place
safeguards to auditor objectivity and independence. It has therefore
established a policy on the provision of services by the Group’s
statutory auditor. The Policy describes the circumstances in which
the auditor may be permitted to undertake non-audit work for the
Group. The Committee oversees compliance with the Policy and
considers and approves requests to use the auditor for non-audit work.
Allowable services are pre-approved up to £100,000, or £10,000 in the
case of certain taxation services. The Company Secretary and his team
deal with day-to-day administration of the Policy, facilitating requests
for approval by the Committee. The Committee receives a report at
each meeting on the non-audit services provided by the auditor and the
Policy is reviewed by theCommitteeannually. Details of the services that
are prohibited and allowed are set out below.
Services that are prohibited include:
– bookkeeping
– design and implementation of financial information systems
– appraisal or valuation services
– actuarial services
– internal audit outsourcing
– management and Human Resource functions
– broker or dealer, investment adviser or investment banking services
– legal, expert and tax services involving advocacy
Allowable services that the Committee will consider for approval include:
– statutory and regulatory audit services and regulatory non-audit services
– other attest and assurance services
– accountancy advice and training
– risk management and controls advice
– transaction support
– taxation services
– business support and recoveries
– translation services
– considered the effectiveness of the Group’s internal controls
over financial reporting;
– received regular reports on ‘Raising Concerns’, including
whistleblowing;
– considered the Fraud Risk Control Framework; and
– reviewed its Terms of Reference to satisfy itself that they enable
the Committee to fulfil its responsibilities.
The Committee also received regular updates during 2008 on:
– Basel II
– MiFID
– Sarbanes-Oxley
– Sanctions compliance
In February 2009, the Committee reviewed its activities in 2008 against its
terms of reference and concluded that it had discharged the responsibilities
delegated to it under those terms of reference.
Approval of financial statements
Barclays has a strong governance process in place to support its framework
of disclosure controls and procedures. That process, in which the Board
Audit Committee plays a key role, is illustrated in Figure 6.
The Legal and Technical Review Committee is an accounting, legal
and regulatory compliance committee, which is responsible for reviewing
the Group’s financial reports and disclosures to ensure that they have been
subject to adequate verification and comply with legal and technical
requirements. Meetings are attended by the Group’s auditors and US
lawyers. The membership of the Disclosure Committee and its role is set
out on page 168. The membership of the Executive Committee and its
role is set out on pages 167 and 168.
This governance process is in place to ensure both management and
the Board are given sufficient opportunity to review and challenge the
Group’s financial statements and other significant disclosures before they
are made public. It also provides assurance for the Group Chief Executive
and Group Finance Director when providing certifications as required under
the Sarbanes-Oxley Act 2002 and recommended by the Turnbull Guidance
on Internal Control. Further details of the Group’s system of internal control
and an assessment of its effectiveness may be found on page 187.