responsibility for financial reporting
The accompanying consolidated financial statements of Royal Bank
of Canada were prepared by management, which is responsible for
the integrity and fairness of the information presented, including
the many amounts that must of necessity be based on estimates
and judgments. These consolidated financial statements were prepared
in accordance with Canadian generally accepted accounting principles
pursuant to Subsection 308 of the Bank Act (Canada), which states
that, except as otherwise specified by the Superintendent of
Financial Institutions Canada, the financial statements are to
be prepared in accordance with Canadian generally accepted accounting
principles. Financial information appearing throughout this Annual
Report is consistent with these consolidated financial statements.
Management has also prepared consolidated financial statements
for Royal Bank of Canada in accordance with United States generally
accepted accounting principles, and these consolidated financial
statements have also been provided to shareholders.
In discharging its responsibility
for the integrity and fairness of the consolidated financial
statements and for the accounting systems from which they are
derived, management maintains the necessary system of internal
controls designed to ensure that transactions are authorized,
assets are safeguarded and proper records are maintained. These
controls include quality standards in hiring and training of
employees, policies and procedures manuals, a corporate code
of conduct and accountability for performance within appropriate
and well-defined areas of responsibility.
The system of internal controls is
further supported by a compliance function, which ensures that
the bank and its employees comply with securities legislation
and conflict of interest rules, and by an internal audit staff,
which conducts periodic audits of all aspects of the bank’s operations.
The Board of Directors oversees management’s responsibilities
for financial reporting through an Audit Committee, which is
composed entirely of directors who are neither officers nor employees
of the bank.
This Committee reviews the consolidated
financial statements of the bank and recommends them to the
board for approval. Other key responsibilities of the Audit
Committee include reviewing the bank’s existing internal control procedures and planned
revisions to those procedures, and advising the directors on
auditing matters and financial reporting issues. The bank’s
Compliance Officer and Chief Internal Auditor have full and unrestricted
access to the Audit Committee.
At least once a year, the Superintendent
of Financial Institutions Canada makes such examination and enquiry
into the affairs of the bank as deemed necessary to ensure that
the provisions of the Bank Act (Canada), having reference to
the safety of the depositors and shareholders of the bank, are
being duly observed and that the bank is in sound financial condition.
Deloitte & Touche LLP, independent auditors appointed by
the shareholders of the bank upon the recommendation of the Audit
Committee, have performed an independent audit of the consolidated
financial statements and their report follows. The shareholders’ auditors
have full and unrestricted access to the Audit Committee to discuss
their audit and related findings.
Gordon M. Nixon
President & Chief Executive Officer
Peter W. Currie
Vice-Chairman & Chief Financial Officer
Toronto, November 25, 2003