# C_2013334EN.01012201.xml

| 15.11.2013 | EN | Official Journal of the European Union | C 334/122 |
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15.11.2013

EN

Official Journal of the European Union

C 334/122

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THE COURT'S STATEMENT OF ASSURANCE PROVIDED TO THE EUROPEAN PARLIAMENT AND THE COUNCIL — INDEPENDENT AUDITOR’S REPORT

THE COURT'S STATEMENT OF ASSURANCE PROVIDED TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

INDEPENDENT AUDITOR’S REPORT

2013/C 334/02

| I. | Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU) the Court has audited:






  (a) | the consolidated accounts of the European Union which comprise the consolidated financial statements (1) and the aggregated reports on the implementation of the budget (2) for the financial year ended 31 December 2012, approved by the Commission on 26 July 2013; and |
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I.

Pursuant to the provisions of Article 287 of the Treaty on the Functioning of the European Union (TFEU) the Court has audited:

(a)

the consolidated accounts of the European Union which comprise the consolidated financial statements (1) and the aggregated reports on the implementation of the budget (2) for the financial year ended 31 December 2012, approved by the Commission on 26 July 2013; and

1

2

| (b) | the legality and regularity of the transactions underlying those accounts. |
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(b)

the legality and regularity of the transactions underlying those accounts.

Management's responsibility

Management's responsibility

| II. | In accordance with Articles 310 to 325 of the TFEU and the Financial Regulation, management is responsible for the preparation and presentation of the consolidated accounts of the European Union on the basis of internationally accepted accounting standards for the public sector and for the legality and regularity of the transactions underlying them. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. Management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities which govern them. The Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Union (Article 317 of the TFEU). |
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II.

In accordance with Articles 310 to 325 of the TFEU and the Financial Regulation, management is responsible for the preparation and presentation of the consolidated accounts of the European Union on the basis of internationally accepted accounting standards for the public sector and for the legality and regularity of the transactions underlying them. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. Management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities which govern them. The Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Union (Article 317 of the TFEU).

Auditor's responsibility

Auditor's responsibility

| III. | The Court's responsibility is to provide, on the basis of its audit, the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. The Court conducted its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that the Court plans and performs the audit to obtain reasonable assurance as to whether the consolidated accounts of the European Union are free from material misstatement and the transactions underlying them are legal and regular. |
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III.

The Court's responsibility is to provide, on the basis of its audit, the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. The Court conducted its audit in accordance with the IFAC International Standards on Auditing and Codes of Ethics and the INTOSAI International Standards of Supreme Audit Institutions. These standards require that the Court plans and performs the audit to obtain reasonable assurance as to whether the consolidated accounts of the European Union are free from material misstatement and the transactions underlying them are legal and regular.

| IV. | An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts and the legality and the regularity of the transactions underlying them. The procedures selected depend on the auditor's judgment, including an assessment of the risks of material misstatement of the consolidated accounts and of material non-compliance of the underlying transactions with the requirements of the legal framework of the European Union, whether due to fraud or error. In making those risk assessments, internal control relevant to the preparation and fair presentation of the consolidated accounts and legality and regularity of underlying transactions, is considered in order to design audit procedures that are appropriate in the circumstances but not for the purposes of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated accounts. |
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IV.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts and the legality and the regularity of the transactions underlying them. The procedures selected depend on the auditor's judgment, including an assessment of the risks of material misstatement of the consolidated accounts and of material non-compliance of the underlying transactions with the requirements of the legal framework of the European Union, whether due to fraud or error. In making those risk assessments, internal control relevant to the preparation and fair presentation of the consolidated accounts and legality and regularity of underlying transactions, is considered in order to design audit procedures that are appropriate in the circumstances but not for the purposes of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated accounts.

| V. | For revenue, the Court’s examination of value added tax and gross national income-based own resources takes as its starting point the relevant macroeconomic aggregates on which these are calculated, and assesses the Commission's systems for processing these until the contributions of the Member States have been received and recorded in the consolidated accounts. For traditional own resources, the Court examines the accounts of the customs authorities and analyses the flow of duties until the amounts are received by the Commission and recorded in the accounts. |
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V.

For revenue, the Court’s examination of value added tax and gross national income-based own resources takes as its starting point the relevant macroeconomic aggregates on which these are calculated, and assesses the Commission's systems for processing these until the contributions of the Member States have been received and recorded in the consolidated accounts. For traditional own resources, the Court examines the accounts of the customs authorities and analyses the flow of duties until the amounts are received by the Commission and recorded in the accounts.

| VI. | For expenditure, the Court examines payment transactions when expenditure has been incurred, recorded and accepted (‘expensed payments’). This examination covers all categories of payments (including those made for the purchase of assets) other than advances at the point they are made. Advance payments are examined when the recipient of funds provides justification for their proper use and the Institution or body accepts the justification by clearing the advance payment, whether in the same year or later. |
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VI.

For expenditure, the Court examines payment transactions when expenditure has been incurred, recorded and accepted (‘expensed payments’). This examination covers all categories of payments (including those made for the purchase of assets) other than advances at the point they are made. Advance payments are examined when the recipient of funds provides justification for their proper use and the Institution or body accepts the justification by clearing the advance payment, whether in the same year or later.

| VII. | The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its opinions. |
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VII.

The Court considers that the audit evidence obtained is sufficient and appropriate to provide a basis for its opinions.

Reliability of the accounts

Reliability of the accounts

Opinion on the reliability of the accounts

Opinion on the reliability of the accounts

| VIII. | In the Court's opinion, the consolidated accounts of the European Union for the year ended 31 December 2012 present fairly, in all material respects, the financial position of the Union as at 31 December 2012, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Financial Regulation and with accounting rules based on internationally accepted accounting standards for the public sector. |
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VIII.

In the Court's opinion, the consolidated accounts of the European Union for the year ended 31 December 2012 present fairly, in all material respects, the financial position of the Union as at 31 December 2012, the results of its operations, its cash flows, and the changes in net assets for the year then ended, in accordance with the Financial Regulation and with accounting rules based on internationally accepted accounting standards for the public sector.

Legality and regularity of the transactions underlying the accounts

Legality and regularity of the transactions underlying the accounts

Revenue

Revenue

Opinion on the legality and regularity of revenue underlying the accounts

Opinion on the legality and regularity of revenue underlying the accounts

| IX. | In the Court’s opinion, revenue underlying the accounts for the year ended 31 December 2012 is legal and regular in all material respects. |
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IX.

In the Court’s opinion, revenue underlying the accounts for the year ended 31 December 2012 is legal and regular in all material respects.

Commitments

Commitments

Opinion on the legality and regularity of commitments underlying the accounts

Opinion on the legality and regularity of commitments underlying the accounts

| X. | In the Court’s opinion, commitments underlying the accounts for the year ended 31 December 2012 are legal and regular in all material respects. |
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X.

In the Court’s opinion, commitments underlying the accounts for the year ended 31 December 2012 are legal and regular in all material respects.

Payments

Payments

Basis for adverse opinion on the legality and regularity of payments underlying the accounts

Basis for adverse opinion on the legality and regularity of payments underlying the accounts

| XI. | The Court concludes that the supervisory and control systems examined are partially effective in ensuring the legality and regularity of payments underlying the accounts (paragraph VI). All policy groups covering operational expenditure are materially affected by error. The Court’s estimate for the most likely error rate for expensed payments underlying the accounts is 4,8 % (3). |
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XI.

The Court concludes that the supervisory and control systems examined are partially effective in ensuring the legality and regularity of payments underlying the accounts (paragraph VI). All policy groups covering operational expenditure are materially affected by error. The Court’s estimate for the most likely error rate for expensed payments underlying the accounts is 4,8 % (3).

3

Adverse opinion on the legality and regularity of payments underlying the accounts

Adverse opinion on the legality and regularity of payments underlying the accounts

| XII. | In the Court’s opinion, because of the significance of the matters described in the basis for adverse opinion on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2012 are materially affected by error. |
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XII.

In the Court’s opinion, because of the significance of the matters described in the basis for adverse opinion on the legality and regularity of payments underlying the accounts paragraph, the payments underlying the accounts for the year ended 31 December 2012 are materially affected by error.

5 September 2013.

Vítor Manuel da SILVA CALDEIRA

President

European Court of Auditors

12, rue Alcide De Gasperi, 1615 Luxembourg, LUXEMBOURG

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(1)  The consolidated financial statements comprise the balance sheet, the statement of financial performance, the cashflow statement, the statement of changes in net assets and a summary of significant accounting policies and other explanatory notes (including segment reporting).

1

(2)  The aggregated reports on implementation of the budget comprise the aggregated reports on implementation of the budget and explanatory notes.

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(3)  On the basis of the sampling approach used in previous years the estimated most likely error would have been 4,5 %.

3

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