Control system in the process of preparation of financial statements

The internal control system for financial reporting at the Bank is delivered by:  

  • group-wide application of standardised accounting policies for valuation, recognition and disclosures, in accordance with International Financial Reporting Standards; 
  • application of internal controls, including: separation of responsibilities within the reporting department, at least two-level authorisation of data, verification of the correctness of data received; 
  • definition of responsibilities and formalising the financial statement preparation process; 
  • definition of the roles and control of compliance with the circulation of financial and accounting documents, and verification in the substantive, formal and accounting terms; 
  • keeping a record of business events in an integrated financial and accounting system, whose configuration corresponds to the accounting policies applicable at the Company, and which contains instructions and controls to ensure the coherence and integrity of data; 
  • independent assessment of financial statements conducted by an independent external auditor.  

The process of financial reporting is subject to ongoing verification. The integrated financial and accounting system plays an important role in the control process for accounting and financial reporting. It not only enables the control of correctness of reported operations, but also allows to identify the individuals who enter and accept particular transactions. Access to financial information is restricted by the privilege system. System access privileges are provided depending on the assigned role and scope of responsibility of the individual, and are subject to strict control.  

The Bank’s accounting policies for contain provisions to ensure the compliance of accounting and financial statements with the applicable regulations, including, in particular: generally accepted accounting principles and qualitative characteristics of financial statements, correctness of valuation and classification of events, mechanisms to secure data sets. To ensure the compliance of our Accounting Policies with updated regulations, including, in particular, with International Financial Reporting Standards, they are regularly updated. The last update was in 2018. 

Limitation of the risk of preparation of financial statements is delivered by the Accounting Department, including through supervision over the quarterly process of monitoring of reconciliation of balances on the accounts in the Bank’s general ledger, by assigning these accounts to the appropriate substantive units. In addition, the process of entering into contracts and launching new products by particular organisational units of the Bank has been tightened up by introducing mandatory review by the Accounting Policy Team. 

In addition, the limitation of the risk of preparation of financial statements is delivered by subjecting the financial statements to a quarterly review (in addition to a semi-annual review) and annual auditing by an independent auditor. The procedure for the selection of the independent auditor as applied by the Bank ensures its independence in delivery of the tasks entrusted to them (the selection is made by the Supervisory Board) and high standard of service. The outcomes of reviews and audits are presented by the auditor to the Supervisory Board’s Audit Committee. 

The contract with the audit firm KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. for conducting the auditing and reviews of standalone and consolidated financial statements was extended for another two years, and covers audits and reviews for 2019–2020.