Читать книгу Effective Product Control - Nash Peter - Страница 26

Historically, the role of financial reporting (which can also be known as financial control) in banking was a little secondary in finance. Reporting was not as stimulating as the front office facing product control and was regarded as a bit of a backwater by some. The key perspective in financial reporting is that of the legal entity and the governance around it is often set in law.

The role of financial reporting is in many ways at least as important, if not more so, as product control. The role was to report to an external body the results of the legal entity under the relevant rules or requirements. This would cover:

• Management reporting to the board of a legal entity.

• Financial reporting, audited financial statements and filing as part of the Companies Act requirements under IFRS and local GAAPs.

• Regulatory reporting to the local regulatory bodies – in the UK this is to the Prudential Regulatory Authority (PRA) and the European Banking Authority (EBA).

• Statistical reporting – in the UK typically this is the Bank of England (BoE).

• Other local filings and enquiries – for example, the Financial Conduct Authority (FCA), Office for National Statistics (ONS), and so forth.

The risks associated with financial reporting are high. The board members are personally responsible for shareholder or creditor loss if they knowingly act in a fraudulent or illegal manner. Regulators can impose fines, custodial sentences, and close the business down if they are not satisfied.

In recent years the importance of this has become particularly focused as the misdemeanours of the industry and lack of vigilance by the regulators have resulted in the media and politicians baying for blood and a large number of new requirements across the regulatory bodies.

The financial reporting team review and challenge the results presented to them, the role of product control is to provide an explanation and rationalization of the business results in the legal entity and thereby allow for onward explanation to stakeholders.