TD Bank 2005 Annual Report Download - page 74

The Bank’s Audit Committee has implemented a policy restricting
the services that may be provided by the Bank’s auditors and
the fees paid to the Bank’s auditors. Any non-audit service to
be provided by the shareholders’ auditors must be permitted by
law and by the policy, and must be pre-approved by the Audit
Committee pursuant to the policy, along with the associated
fees for those services. The policy provides for the annual
pre-approval of specific types of services, together with the
maximum amount of the fees that may be paid for such
services, pursuant to policies and procedures adopted by the
Audit Committee, and gives detailed guidance to management
as to the specific services that are eligible for such annual
pre-approval. All other services and the associated fees must also
be specifically pre-approved by the Audit Committee as they
arise throughout the year. In making its determination regarding
non-audit services, the Audit Committee considers the compli-
ance with the policy and the provision of non-audit services in
the context of avoiding impact on auditor independence. This
includes considering applicable regulatory requirements and
guidance and whether the provision of the services would place
the auditors in a position to audit their own work, result in the
auditors acting in the role of the Bank’s management or place
the auditors in an advocacy role on behalf of the Bank. By law,
the shareholders’ auditors may not provide certain services to
the Bank or its subsidiaries. Each quarter, the Bank’s Chief
Financial Officer makes a presentation to the Audit Committee
detailing the non-audit services performed by the Bank’s auditors
on a year-to-date basis, and details of any proposed assignments
for consideration by the Audit Committee and pre-approval,
if appropriate.
TD BANK FINANCIAL GROUP ANNUAL REPORT 2005 Management’s Discussion and Analysis
70
Based on current U.S. Securities and Exchange Commission (SEC)
rules as per the Sarbanes-Oxley Act of 2002, the Chief Executive
Officer and Chief Financial Officer will be required to certify as at
October 31, 2006 that they have assessed the effectiveness of
internal controls over financial reporting.
In preparation for this certification, the Bank has dedicated
resources in place to document the internal control environment
and evaluate its design and operating effectiveness. These
resources have also been actively engaged with the Bank’s
external auditors in the development and implementation of
the activities necessary to meet the requirements of the
Sarbanes-Oxley Act of 2002.
During fiscal 2005, there have been no significant changes in
the Bank’s internal controls over financial reporting that have
materially affected, or are reasonably likely to materially affect
the Bank’s internal controls over financial reporting. The Bank is,
however continually improving its infrastructure and controls.
An evaluation was performed under the supervision and with
participation of the Bank’s management, including the President
and Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Bank’s disclosure controls and procedures,
as defined in the rules of the SEC and Canadian Securities
Administrators, as of October 31, 2005. Based on that
evaluation, the Bank’s management concluded that the
Bank’s disclosure controls and procedures were effective as
of October 31, 2005.
(thousands of Canadian dollars) 2005 2004 2003
Audit fees $13,741 $10,464 $ 7,773
Audit related fees 3,276 5,023 605
Tax fees 3,373 2,866 3,457
All other fees 1,987 3,867 6,368
Total $22,377 $22,220 $18,203
Audit fees are fees for the professional services in connection
with the audit of the Bank’s financial statements or other services
that arenormally provided by the Bank’s auditors in connection
with statutory and regulatory filings or engagements. In addition
to including fees for services necessary to perform an audit or
review in accordance with generally accepted auditing standards,
the Bank’s audit fees include fees paid to the Bank’s auditors for
comfort letters, statutory audits, attest services, consents and
assistance with and review of documents filed with regulators.
Audit related fees are fees for assurance and related services
that are performed by the Bank’s auditors. These services include
employee benefit plan audits, accounting consultations in
connection with acquisitions and divestitures, application and
general control reviews (including Sarbanes-Oxley pilot audit),
attest services not required by statute or regulation and interpre-
tation of financial accounting and reporting standards.
Tax fees are fees for services performed by the Bank’s auditors
for tax compliance, tax advice and tax planning except those tax
services related to the audit. Tax compliance generally involves
preparation of original and amended tax returns and claims for
refund. Tax advice includes assistance with tax audits, appeals
and rulings plus tax advice related to mergers and acquisitions.
Tax planning includes expatriate and domestic tax services and
transfer pricing matters.
All other fees primarily include fees for insolvency and viability
matters either paid by the Bank or by third parties. In these
instances, the Bank’s auditors are retained to provide assistance
on operational business reviews, lender negotiations, business
plan assessments, debt restructuring and asset recovery. The
amount of insolvency and viability fees paid by third parties is
$.6 million (2004 – $1.6 million; 2003 – $3.5 million). Also
included in this category are fees for mutual funds audits
(including tax and prospectus renewals), the purchase of soft-
ware for compliance and regulatory filings, benchmark studies,
translation of documents, audit of charitable organizations
and section 5900/SAS 70 reports on control procedures at a
service organization.
FEES PAID TO THE BANK’S AUDITORS
TABLE 3 3
ACCOUNTING STANDARDS AND POLICIES
Controls and Procedures
ACCOUNTING STANDARDS AND POLICIES
Bank’s Auditors