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, including the accounting requirements of the Superintendent
of Financial Institutions Canada. 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.
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.
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 banks operations.
The Board of Directors
oversees managements 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 banks existing
internal control procedures and planned revisions to those procedures, and advising
the directors on auditing matters and financial reporting issues. The banks
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,
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.
& Touche LLP and PricewaterhouseCoopers 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.
President & Chief Executive Officer
Peter W. Currie
Vice-Chairman & Chief Financial Officer
Toronto, November 19, 2002
To the shareholders of Royal Bank of Canada
We have audited
the consolidated balance sheet of Royal Bank of Canada as at October 31, 2002
and 2001, and the consolidated statements of income, changes in shareholders
equity and cash flows for each of the years in the three-year period ended October
31, 2002. These consolidated financial statements are the responsibility of the
banks management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance
with Canadian generally accepted auditing standards. Those standards require that
we plan and perform an audit to obtain reasonable assurance whether the consolidated
financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation.
In our opinion, these consolidated
financial statements present fairly, in all material respects, the financial position
of the bank as at October 31, 2002 and 2001, and the results of its operations
and its cash flows for each of the years in the three-year period ended October
31, 2002, in accordance with Canadian generally accepted accounting principles,
including the accounting requirements of the Superintendent of Financial Institutions
We also reported separately on November 19, 2002, to the shareholders
of the bank on our audit, conducted in accordance with Canadian generally accepted
auditing standards, where we expressed an opinion without reservation on the October
31, 2002 and 2001, consolidated financial statements, prepared in accordance with
United States generally accepted accounting principles.
November 19, 2002