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1. Overview
4. Financial statements
3.
Management report
2. Business review
Rothschild & Co | Annual Report 2017
179
4 Revenue recognition for advisory work
and other services
Key audit matter
As at 31 December 2017, the Group records net fees for Advisory and other
services over the nine-month period of €860 million, representing 60% of
net banking income.
Revenues are recognized either during the period during which the service
is provided, or when a significant act is completed or an event occurs.
We considered that revenue recognition for Advisory and other services was
a key audit matter considering the relative importance of these fees in the
Group’s income statement and because the recognition of these revenues
requires a case-by-case analysis of the contractual conditions.
Information on the recognition of revenue from Advisory and other services
is presented in note III.B.5 and note VI.23 of the consolidated financial
statements on pages 130 and 160.
Our response
Our procedures consisted of:
• understanding the internal control system put in place within the Group;
• testing the design and effectiveness of the key controls enabling
management to assess the generating event that triggers the invoicing
and to determine the amount to be billed;
• testing, on a sample basis, the occurrence of the events generating
contractual exigibility of the fees as well as the correct cut-off to the
related accounting period.
Lastly, we made sure that the information presented in the financial
statements is appropriate.
Verification of the Information Pertaining
to the Group Presented in Management
Report
As required by law we have also verified in accordance with professional
standards applicable in France the information pertaining to the Group
presented in Management report.
We have no matters to report as to its fair presentation and its consistency
with the consolidated financial statements.
Report on Other Legal and Regulatory
Requirements
Appointment of the statutory auditors
We were appointed as statutory auditors of Rothschild & Co by the General
Meeting held on 29 September 2005 for KPMG and on 24 June 2003 for
Cailliau Dedouit et Associés.
As at 31 December 2017, KPMG S.A. and Cailliau Dedouit et Associés
were in the 13
th
year and 15
th
year of total uninterrupted engagement,
of which respectively 13 and 15 years since securities of the Company
were admitted to trading on a regulated market, respectively.
Responsibilities of Management and Those
Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation
of the consolidated financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union and for
such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is
responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless it is expected
to liquidate the Company or to cease operations.
The Audit Committee is responsible for monitoring the financial reporting
process and the effectiveness of internal control and risks management
systems and where applicable, its internal audit, regarding the accounting
and financial reporting procedures.
The consolidated financial statements were approved by Management.