Management’s
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 United States 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 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, 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 |