2011-04-07_REPORT - M1980244

• Permit No: M1980244
• IBM Index Class Name: REPORT
• Doc Date: 4/7/2011
• Doc Name: Annual Fee/Report/Map
• From: CC&V
• To: DRMS
• Permit Index Doc Type: Annual Fee/Report
• Email Name: BMK
• Media Type: D
• Archive: No

CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION
The management of The Bank of Nova Scotia (the Bank) is responsible free access to, and meets periodically with the Audit and Conduct
for the integrity and fair presentation of the financial information
contained in this Annual Report. The consolidated financial statements
have been prepared in accordance with Canadian generally accepted
accounting principles. The consolidated financial statements also comply
with the accounting requirements of the Bank Act.
The consolidated financial statements, where necessary, include
amounts which are based on the best estimates and judgement of
management. Financial information presented elsewhere in this Annual
Report is consistent with that shown in the consolidated financial
statements.
Management has always recognized the importance of the Bank_
maintaining and reinforcing the highest possible standards of conduct in
all of its actions, including the preparation and dissemination of
statements fairly presenting the financial condition of the Bank. In this
regard, management has developed and maintains a system of account-
ing and reporting which provides for the necessary internal controls to
ensure that transactions are properly authorized and recorded, assets
are safeguarded against unauthorized use or disposition, and liabilities
are recognized. The system is augmented by written policies and
procedures, the careful selection and training of qualified staff, the
establishment of organizational structures providing an appropriate and
well-defined division of responsibilities, and the communication of
policies and guidelines of business conduct throughout the Bank.
Management, under the supervision of and the participation of the
Chief Executive Officer and the Chief Financial Officer, have a process in
place to evaluate disclosure controls and procedures and internal control
over financial reporting in line with Canadian and U.S. securities
regulations.
The system of internal controls is further supported by a professional
staff of internal auditors who conduct periodic audits of all aspects of
the Bank's operations. As well, the Bank's Chief Auditor has full and
Review Committee of the Board of Directors. In addition, the Bank's
compliance function maintains policies, procedures and programs
directed at ensuring' compliance with regulatory requirements, including
conflict of interest rules.
The Office of the Superintendent of Financial Institutions Canada,
which is mandated to protect the rights and interests of the depositors
and creditors of the Bank, examines and enquires into the business and
affairs of the Bank, as deemed necessary, to determine whether the
provisions of the Bank Act are being complied with, and that the Bank is
in a sound financial condition.
The Audit and Conduct Review Committee, composed entirely of
outside directors, reviews the consolidated financial statements with
both management and the independent auditors before such
statements are approved by the Board of Directors and submitted to the
shareholders of the Bank.'
The Audit and Conduct Review Committee reviews and reports their
findings to the Board of Directors on all related party transactions that
may have a material impact on the Bank.
KPMG LLP, the independent auditors appointed by the shareholders
of the Bank, have audited the consolidated financial statements of the
Bank for each of the years in the three-year period ended October 31,
2010 in accordance with Canadian generally accepted auditing
standards and the standards of the Public Company Accounting
Oversight Board (United States) and have expressed their opinions upon
completion of such audits in the following report to the shareholders.
The Shareholders' Auditors have full and free access to, and meet
periodically with, the Audit and Conduct Review Committee to discuss
their audit, including any findings as to the integrity of the Bank's
accounting, financial reporting and related matters.
Rick Waugh
President and Chief Executive Officer
Toronto, Canada
December 3, 2010
Luc Vanneste
Executive Vice-President
and Chief Financial Officer
108 VAQ Scotiabank Annual Report -