Production of the ECB’s financial statements
The preparation and approval process for the ECB’s financial statements prior to their publication is illustrated in the chart below.
The Financial Accounting and Reporting Division of the Directorate Finance, part of the Directorate General Corporate Services, is responsible for preparing the financial statements. It does so in cooperation with other ECB business areas.
The ECB’s financial statements are audited by an independent external auditor. The external auditor is recommended by the Governing Council and approved by the EU Council. Its responsibility is to express an opinion as to whether the financial statements give a true and fair view of the financial position of the ECB and of the results of its operations, in accordance with the accounting policies established by the Governing Council. It examines the books and accounts of the ECB, evaluates the adequacy of internal controls applied to the preparation and presentation of the financial statements, and assesses the appropriateness of the accounting policies used. The financial reporting processes and the ECB’s financial statements may also be subject to internal audit.
The ECB’s Assets and Liabilities Committee (ALCO), which is composed of representatives from various business areas of the ECB, systematically monitors and assesses all factors that may have an impact on the ECB’s financial statements. It reviews them before they are submitted to the Executive Board for endorsement. After the Executive Board has authorised their issuance, the financial statements, the independent auditor’s report and all relevant documentation, are submitted to the Audit Committee. The Audit Committee supports the Governing Council in its responsibilities concerning, among other things, the integrity of financial information and the oversight of internal controls. In this context, the Audit Committee assesses the overall adequacy and effectiveness of the processes underlying the establishment of the ECB’s financial statements and the overall adequacy of the associated disclosures. It also reviews any significant accounting or financial reporting issue that could have an impact on the ECB’s financial statements.
The ECB’s financial statements, management report and note on profit distribution/allocation of losses are approved by the Governing Council in February of each year and published immediately thereafter, together with the independent auditor’s report.
- To reinforce public assurance as to the independence of the ECB’s external auditors, the principle of audit firm rotation is applied.
- The Audit Committee is composed of up to six members: the Vice-President of the ECB, two senior governors of euro area NCBs and up to three external members, chosen from among high-ranking officials with experience in central banking. For more information, see the Audit Committee mandate and the Corporate governance page.