Report on the Description of the National Settlement Depository Controls, Suitability of Controls Design and Operating Effectiveness,
12 October, 2015
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An assurance engagement to report on the Description of a service organization’s system and
the suitability of the design and operating effectiveness of controls at a service organization
involves performing procedures to obtain evidence about the Description, and the suitability of
design and operating effectiveness of controls. The procedures selected depended on the service
auditor’s judgment, including the assessment of the risks that the Description is not fairly
presented, and that the controls were not suitably designed or operating effectively. Our
procedures also included testing the operating effectiveness of those controls that we consider
necessary to provide reasonable assurance that the control objectives stated in the Description
were achieved. An assurance engagement of this type also includes evaluating the overall
presentation of the Description, the suitability of the control objectives stated therein, and the
suitability of the criteria specified by the service organization and described on page 21.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Inherent limitations
NSD’s
description is prepared to meet the common needs of a broad range of customers and
their auditors and may not, therefore, include every aspect of the system that each individual
customer may consider important in its own particular environment. Also, because of their
nature, controls at a service organization may not prevent or detect and correct all errors or
omissions within the
settlement depository, clearing and repository services. Also, the
projection to future periods of any evaluation of the fairness of the presentation of the
description, or opinion about the suitability of the design or operating effectiveness of the
controls to achieve the related control objectives is subject to the risk that controls at a service
organization may become inadequate or fail.
Our independence and quality control
We have complied with the independence and other ethical requirements of the Code of Ethics
for Professional Accountants issued by the International Ethics Standards Board for
Accountants, which is founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour.
Our firm applies International Standard on Quality Control 1 and accordingly maintains a
comprehensive system of quality control including documented policies and procedures
regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Opinion
In our opinion, in all material respects, based on the criteria including the control objectives
described in the NSD’s Description on pages 8-34:
a.
the Description fairly presents the processes of settlement depository, clearing and
repository services that were operated throughout the period February, 18 to August, 18
2015;
b.
the controls related to the control objectives stated in the Description were suitably
designed to provide reasonable assurance that the specified control objectives would be
achieved if the described controls operated effectively throughout the period from
February, 18 to August, 18 2015;
