2007 REGISTRATION DOCUMENT

2 ReportCORPORATE GOVERNANCEof the Chairman of the Board of Directors on the conditions for the preparation and organisationof the work of the Board and on internal control procedures implemented by BNP Paribas< Contents >INTERNAL C ONTROL P ROCEDURES R ELATING TO THE P REPARATIONAND P ROCESSING OF A CCOUNTING AND F INANCIAL I NFORMATION1ROLES AND RESPONSIBILITIES REGARDINGTHE PREPARATION AND PROCESSING OFACCOUNTING AND FINANCIAL INFORMATIONActing under the authority of the Chief Executive Officer, the GroupFinance-Development function is responsible for the preparation andprocessing of accounting and financial information. Its duties andresponsibilities, as described in its Charter, include:■ producing and distributing high quality financial statements;■ producing quality management accounts, and providing all forecastquantitative data needed for steering Group policy;■ overseeing project management for the Group’s financial informationsystems;■ optimising the Group’s financial position;■ ensuring that the Group’s financial position is well presented to thefinancial markets;■ coordinating the Group’s development strategy and managing externalgrowth;■ providing Executive Management with early warnings.The responsibilities of the Finance function are carried out by the localFinance departments within each entity, by core business Finance teamsand by the Group Finance-Development function.The production of accounting and financial data, and controls designedto ensure their reliability, are first handled by the Finance Departmentof the accounting entity (1) which reports this information to the corebusiness, then on to the Group, and attests that it is reliable, based onthe internal certification procedure described below.The core businesses/business lines then perform further controls at theirlevel on the financial statements prepared by the accounting entities.They enhance the quality of the reporting by carrying out appropriatereconciliations of accounting and management data.The Group Finance-Development function gathers all the accounting andmanagement information produced by the accounting entities in linewith formalised reporting procedures validated by the core businesses/business lines. It then consolidates these data for use by ExecutiveManagement or for external reporting to third parties.PREPARATION OF FINANCIAL INFORMATIONAND PERMANENT CONTROL SYSTEMAccounting policies and rulesThe local financial statements for each entity are prepared underlocal GAAP. Since 1 January 2005, the Group consolidated financialstatements have been prepared under IFRS (International FinancialReporting Standards) as adopted for use by the European Union andFrench GAAP is no longer used.The Accounting Policies Department of the central Group GeneralAccounting Department defines, based on IFRS, the accounting policiesto be applied on a Group-wide basis, monitors regulatory changesand prepares new internal accounting policies and interpretations inaccordance with such changes. An IFRS accounting manual has beenproduced and distributed to accounting teams within core businesses,business lines and entities.The central Budget and Strategic Management Control Departmentdraws up management control rules that apply to all the Group’s businesslines. The Group’s accounting and management control policies can beaccessed by the accounting and management control teams in real timevia the Group intranet.As regards the definition of Internal Control, the organisation of theInternal Control environment and its general underlying principles, theBNP Paribas Group refers to the framework set out in CRBF Regulation97-02 (2) on internal control within banks and investment firms.Procedures and systems for preparingconsolidated financial dataThe information used to prepare the BNP Paribas Group consolidatedfinancial statements is derived from the Bank’s transaction processingsystems through two separate reporting channels, one dedicatedto accounting data and the other to management data. Both datacollection channels use an integrated consolidation software packageknown as MATISSE (“Management & Accounting Information System”).This integrated consolidation package is operated and maintained by adedicated team within the Group Finance-Development function. Atlocal level, the Finance teams enter validated financial and accountingdata into the system.This reporting process applies to the channels dedicated to both financialand management accounting data:Accounting data: the procedures for preparing the Group’s financialstatements are set out in the guidelines distributed to all consolidatedentities. This facilitates the standardisation of accounting and financialdata and compliance with Group accounting standards. Each Groupentity closes its accounts on a monthly or quarterly basis and preparesa consolidation reporting package and management accounts inaccordance with Group reporting deadlines. The validation procedureswhich accompany each phase in the reporting process seek to verifythat:■ Group accounting standards have been correctly applied;■ inter-company transactions have been correctly adjusted andeliminated for consolidation purposes;■ pre-consolidation entries have been correctly recorded.2345678910(1) “Accounting entity” refers to the parent company, BNP Paribas, as well as each of the consolidated subsidiaries and branches.(2) Amended by Regulations 2001-01, 2004-02 and the Decrees of 31 March 2005, 17 June 2005, 20 February 2007 and 2 July 2007.11602007 Registration document - BNP PARIBAS