BP 2011 Annual Report Download - page 137

BP Annual Report and Form 20-F 2011 135
Corporate governance
Corporate governance
Controls and procedures
Evaluation of disclosure controls and procedures
The company maintains ‘disclosure controls and procedures’, as such term
is defined in Exchange Act Rule 13a-15(e), that are designed to ensure
that information required to be disclosed in reports the company files or
submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated
and communicated to management, including the company’s group
chief executive and chief financial officer, as appropriate, to allow timely
decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures,
our management, including the group chief executive and chief financial
officer, recognize that any controls and procedures, no matter how
well designed and operated, can provide only reasonable, not absolute,
assurance that the objectives of the disclosure controls and procedures
are met. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within the company have been
detected. Further, in the design and evaluation of our disclosure controls
and procedures our management necessarily was required to apply its
judgement in evaluating the cost-benefit relationship of possible controls
and procedures. Also, we have investments in certain unconsolidated
entities. As we do not control these entities, our disclosure controls and
procedures with respect to such entities are necessarily substantially
more limited than those we maintain with respect to our consolidated
subsidiaries. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected. The company’s disclosure controls and procedures have been
designed to meet, and management believes that they meet, reasonable
assurance standards.
The company’s management, with the participation of the
company’s group chief executive and chief financial officer, has evaluated
the effectiveness of the company’s disclosure controls and procedures
pursuant to Exchange Act Rule 13a-15(b) as of the end of the period
covered by this annual report. Based on that evaluation, the group chief
executive and chief financial officer have concluded that the company’s
disclosure controls and procedures were effective at a reasonable
assurance level.
Management’s report on internal control over financial reporting
Management of BP is responsible for establishing and maintaining adequate
internal control over financial reporting. BP’s internal control over financial
reporting is a process designed under the supervision of the principal
executive and financial officers to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of BP’s financial
statements for external reporting purposes in accordance with IFRS.
As of the end of the 2011 fiscal year, management conducted an
assessment of the effectiveness of internal control over financial reporting
in accordance with the Internal Control Revised Guidance for Directors on
the Combined Code (Turnbull). Based on this assessment, management
has determined that BP’s internal control over financial reporting as of
31 December 2011 was effective.
The company’s internal control over financial reporting includes policies and
procedures that pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and dispositions of assets;
provide reasonable assurances that transactions are recorded as necessary
to permit preparation of financial statements in accordance with IFRS
and that receipts and expenditures are being made only in accordance
with authorizations of management and the directors of BP; and provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of BP’s assets that could have
a material effect on our financial statements. BP’s internal control over
financial reporting as of 31 December 2011 has been audited by
Ernst & Young LLP, an independent registered public accounting firm,
as stated in their report appearing on page 177 of this Annual Report and
Form 20-F 2011.
Changes in internal control over financial reporting
There were no changes in the group’s internal controls over financial
reporting that occurred during the period covered by the Form 20-F that
have materially affected or are reasonably likely to materially affect our
internal controls over financial reporting.