Universal registration document and annual financial report 2020

2020 Universal registration document and annual financial report - BNP PARIBAS 115

2CorPorate GovernanCe and internal Control

Internal control

INTERNAL CONTROL PROCEDURES RELATING TO PREPARING AND PROCESSING ACCOUNTING AND FINANCIAL INFORMATION

ROLES AND RESPONSIBILITIES FOR PREPARING AND PROCESSING ACCOUNTING AND FINANCIAL INFORMATION Under the authority of the Chief Operating Officer, the Finance Function is responsible for preparing and processing accounting and financial information. It also performs an independent control mission which aims to ensure control of the risk related to accounting and financial information. The specific missions assigned by the Group to the Finance Function are defined by a charter. These consist of:

■ preparing the financial information and guaranteeing the consistency and fairness of the financial and prudential information published, in compliance with the regulatory framework and standards;

■ providing Executive Management with support for the Group s economic management at each level of its organisation;

■ defining accounting policies, management and prudential standards for the Group and overseeing their operational integration;

■ defining, deploying and supervising the permanent control system concerning financial information for the entire Group;

■ managing the Group s equity;

■ ensuring the Group s financial communication and monitoring of the BNP Paribas share price, shareholders and market reactions;

■ managing relations with market authorities and investors and organising Annual General Meetings;

■ coordinating the Group s banking supervision, in particular the relationship with the ECB;

■ defining and managing the organisation of the Finance Function and monitoring its resources and costs;

■ managing the implementation of the target operational system, contributing to the definition of the functional architecture and the design of the Finance systems and deploying them.

All these missions require those involved to be fully competent in their particular areas, to understand and check the information they produce and to comply with the required standards and time limits. Particular attention is paid to compliance, quality and integrity of the information used and data protection. All those involved in the function have a duty to alert General Management. The missions of the function are carried out in conjunction with the Risk and ALM Treasury functions for regulatory requirements, with the Project Management team for the Finance and Risk Functions, housed within Group IT, with regard to user processes and the any changes to the information system. In practice, the responsibility of the Finance Function is carried out as follows:

■ the financial data produced is the responsibility of the Finance Department of each entity, whether produced at its own level or by shared regional platforms; when they contribute to the Group s consolidated results, they are sent to the divisions/businesses for approval;

■ the production of forecast financial data is carried out by the divisions/ businesses, ensuring their consistency with the actual data produced by the entities or regional platforms;

■ centrally, the Finance Function prepares the reporting instructions distributed to all divisions/business lines and consolidated entities in order to ensure that the data is homogeneous and complies with the Group s rules. It gathers all the accounting and management information produced by the entities and approved by the divisions/ businesses and assembles and consolidates these data for use by Executive Management or for communication to third parties.

PRODUCTION OF ACCOUNTING AND FINANCIAL DATA

Accounting policies and rules

The local financial statements for each entity are prepared following the accounting standards prevailing in the country where the entity carries on business, while the Group consolidated financial statements are prepared under IFRS (International Financial Reporting Standards) as adopted by the European Union.

Within the Finance Function, the Group Accounting Policies Department defines the IFRS-based accounting principles to be applied to the Group as a whole. It monitors changes to regulations and interprets them as necessary by issuing new principles. A manual of the Group s IFRS accounting principles is available for the divisions/businesses and entities on the internal network communication tools ( intranet ) of BNP Paribas. It is regularly updated to reflect regulatory changes.

In addition, the Group Accounting Policies Department also responds to requests from the divisions/businesses or accounting entities for specific accounting studies, particularly when a new financial product or transaction is designed or recorded in the accounts.

Lastly, it is also responsible for preparing management principles and standards that take into account the needs identified by the management teams. These principles and standards can also be accessed using internal network tools (intranet).

The regulations relating to solvency fall under the Risk Function (with the contribution of the Finance Function), while regulations on liquidity fall under the ALM Treasury (with the contribution of the Finance and Risk Functions) and regulations relating to the leverage ratio fall under the Finance Function (with the contribution of the Risk Function).