Control of Financial and Business Operations
In order to verify and validate financial statements prepared in compliance with Russian law, as well as IFRS (International Financial Reporting Standards) financial statements, Sberbank hires auditing companies on a contractual basis which operate in compliance with Russian law and the International Auditing Standards.
The bank holds an annual public tender to select an auditing company. Tender documents are approved by Sberbank’s Tender Committee for the purchase of goods, work and services, and are published on the bank’s official website. The auditing company selected as a result of the tender shall be approved by the Executive Board, the Audit Committee of the Supervisory Board, and the Supervisory Board, as well as by Sberbank’s Annual General Shareholders Meeting.
The auditor’s fee is determined by tender within the framework of public tenders, further formalised in the audit contract and approved by the Supervisory Board.
On June 6, 2014, the bank’s Annual General Shareholders Meeting approved CJSC Ernst & Young Vneshaudit as Sberbank’s auditor in 2014 and Q1 2015. Ernst & Young companies are also auditors of Sberbank’s main subsidiaries. Expenses of Sberbank Group for Sberbank’s auditor were as follows:
|Audit of annual financial statements (including regulatory reporting, IFRS reporting, consolidated and separate financial statements)||174.3||134.2|
|Interim audits and reviews||100.9||85.7|
|Tax consulting services||66.8||49.4|
|Other consulting services (not related to taxation)||129.5||153.1|
Statutory Audit Commission
The Annual General Shareholders’ Meeting selects the Statutory Audit Commission to monitor the bank’s financial and business operations.
The Statutory Audit Commission examines (audits) the bank’s financial and business operations at year-end as well as at any other time at the initiative of bodies and individuals specified in Russian Federal Law No.
|1||Natalia Borodina||Head of the Financial Operations Audit and Credit Institutions Engagement Division, Internal Audit Department, Central Bank of Russia|
|2||Vladimir Volkov||Deputy Chief Accountant, Central Bank of Russia & Deputy Director of the Accounting and Reporting Department|
|3||Tatiana Domanskaya||Head of the External Regulatory Bodies Relations Division, Internal Control, Inspection and Audit Office, Sberbank|
|4||Yulia Isakhanova||Head of the Financial Control Division, Finance Department, Sberbank|
|5||Alexei Minenko||Deputy Chief Accountant, Sberbank, and Deputy Director of the Accounting and Reporting Division, Sberbank|
|6||Olga Polyakova||Director of the Internal Audit Department, Central Bank of Russia|
|7||Natalia Revina||Director of the Risk Methodology and Control Department, Sberbank|
Based on the resolution of the Annual General Shareholders Meeting held on June 6, 2014, members of the Statutory Audit Commission received remuneration in the amount of RUB 3.3mn for 2013 associated with their membership in this control body.
Internal Audit Service
The Internal Audit Service is a set of the bank’s structural units that are responsible for examining and assessing the effectiveness of the internal control system, risk management system, information security system, accounting and reporting reliability, and have a number of other supervisory responsibilities, including monitoring compliance of the bank’s financial and business operations with the internal control procedures.
The Internal Audit Service applies the best internal auditing practices, including the International Professional Practices Framework of Internal Audit (Internal Audit Standards, Definition of Internal Audit and Code of Ethics) developed by the International Institute of Internal Auditors.
The Service inspects all of the bank’s business areas and may check any bank division or employee, as well as any corporate member of the Group.
The Internal Audit Service has set up an independent channel for bank employees to report (including confidentially) violations of the law and internal procedures, cases of abuse and non-compliance with the professional code of ethics by any bank employee or any member of the governing body or inspection body monitoring the bank’s financial and business operations.
The divisions of the Internal Audit Service conducted over 5,900 scheduled audits and over 9,400 random audits in 2014 in accordance with the schedule approved by the Supervisory Board, and as ordered by the bank’s management.
In 2014, the Internal Audit Service performed 42 audits of financial and business operations of subsidiaries and affiliated non-credit institutions, as well as audits of four subsidiary banks.
The Internal Audit Service is functionally accountable to the Supervisory Board and administratively reports to the CEO and Chairman of the Executive Board.