Internal Auditing

Internal Auditing supports the corresponding activities within the Raiffeisen Group and supports the Board of Directors and its committees in the performance of their tasks by providing objective and independent assessments of the effectiveness of control and risk management processes. It reviews compliance with requirements set out in laws, regulations and the Articles of Association, as well as the proper functioning of the operational structure, information flows, accounting and IT. Internal Auditing has unlimited auditing, information and access rights within the Raiffeisen Group. Internal Auditing conducts its auditing activities on the basis of an annual audit schedule which is approved by the Board of Directors and coordinated with the auditing activities of the regulatory audit firm and the auditor for the purposes of the Swiss Code of Obligations. In addition, the Board of Directors may use Internal Auditing for special tasks such as special audits. Internal Auditing reports to the Audit Committee and the Risk Committee (Audit and Risk Committee until 16 June 2018) and presents an annual activity report to the Board of Directors.

Daniel Dal Santo has been the Head of Internal Auditing since 2015. He reports directly to the Audit Committee (Audit and Risk Committee until 16 June 2018) of the Board of Directors and participates in Board of Directors, Audit Committee and Risk Committee meetings (Audit and Risk Committee until 16 June 2018) (six meetings of the Board of Directors, two meetings of the Audit and Risk Committee and three meetings each of the Audit Committee and Risk Committee in 2018). Internal Auditing had 69.8 full-time equivalents at the end of 2018 and performs its auditing activities in compliance with the rules and standards of the Institute of Internal Auditing Switzerland (IIAS).

Auditor for the purposes of the Swiss Code of Obligations and regulatory auditor

Raiffeisen banks

The Raiffeisen General Meeting elects the auditors for the purposes of the Swiss Code of Obligations for a term of three years each time. PricewaterhouseCoopers Ltd has been the regulatory audit firm and the auditor for the purposes of the Swiss Code of Obligations of the individual Raiffeisen banks since June 2005. It is supported by Raiffeisen Switzerland's Internal Auditing department when conducting the audits of the Raiffeisen banks required by FINMA under Swiss banking law.

Raiffeisen Switzerland and Group companies

Since the 2007 financial year, PricewaterhouseCoopers Ltd has been the regulatory audit firm and the auditor for the purposes of the Swiss Code of Obligations for the whole Raiffeisen Group. This includes not only the Raiffeisen banks but also the Group companies pursuant to note 7. The auditor is appointed by the delegates for a term of three years. PricewaterhouseCoopers Ltd was elected auditor for the purposes of the Swiss Code of Obligations and electable auditor for the Raiffeisen banks at the Delegate Meeting for a period of three years (2018 to 2020) on 16 June 2018. The rights and obligations are governed by the provisions of the Swiss Code of Obligations.

Raiffeisen Group

PricewaterhouseCoopers Ltd, St.Gallen, is also responsible for auditing the consolidated annual financial statements. Beat Rütsche has been the lead auditor for the Raiffeisen Switzerland Cooperative and the consolidated annual financial statements of the Raiffeisen Group since the 2012 financial year. Stefan Keller Wyss has been the lead auditor for coordinating the audits of all Raiffeisen banks since the 2017 financial year. The lead auditors may carry out this mandate for seven years.*

* Due to the rotation requirement stipulated by the Swiss Code of Obligations, Beat Rütsche will resign as lead auditor as of 31 December 2018. Rolf Birrer will take over this position as of 1 January 2019.

Audit fees

The fees of the auditing firms amount to CHF 12.7 million for services relating to the full audit of the individual annual financial statements, the Group accounts and the audits under Swiss banking law, and CHF 0.6 million for tax advisory and other consulting services.

Information tools available to the regulatory audit firm

The risk assessment, the audit plan derived from it, and the auditors' reports are examined by the Audit Committee (Audit and Risk Committee until 16 June 2018) and discussed with the lead auditor. In 2018, the auditor in charge attended all five meetings of the Audit Committee (Audit and Risk Committee until 16 June 2018) to discuss the audit firm's reports.

Supervision and control of the external auditor

The auditor PricewaterhouseCoopers Ltd fulfils the requirements of the Swiss Federal Banking Act and is licensed by FINMA to audit banking institutions. Each year, the Audit Committee (Audit and Risk Committee until 16 June 2018) assesses the performance, remuneration and independence of the external auditor and ensures cooperation with the Internal Auditing department. In this assessment, it also looks for conflicts between auditing activities and consulting mandates.