Credit Suisse Group AG disclosed a ‘material weakness’ in its internal controls over the financial reporting process during 2021 and 2022, in its recently published annual report for 2022.
Earlier, the Securities and Exchange Commission raised last-minute questions about the cash-flow statements for 2019 and 2020, which the bank stated had since been resolved. As a result, Credit Suisse was forced to postpone the release of its annual report from last week.
After announcing on March 9 that there will be a technical delay of publication of the 2022 Annual Report, Credit Suisse (Schweiz) AG published its Annual Report 2022 on March 14.
In the notes to the financial statements, Credit Suisse Group says that based upon its review and evaluation, the Group’s management has concluded that, as of December 31, 2022, the Group’s internal control over financial reporting was not effective as it did not design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements.
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The Board of Directors of Credit Suisse (Schweiz) AG concluded that this material weakness could result in misstatements of account balances or disclosures that would result in a material misstatement to the annual financial statements of Credit Suisse (Schweiz) AG that potentially would not be prevented or detected.
As a consequence, the statutory auditor PricewaterhouseCoopers AG (PwC) has noted that Credit Suisse (Schweiz) AG did not design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements within this system.
Notwithstanding the existence of this material weakness in internal control over financial reporting, Credit Suisse (Schweiz) AG confirms that its financial statements as at December 31, 2022 comply with Swiss law as reflected in PwC’s report on those financial statements.
Credit Suisse (Schweiz) AG is a Swiss bank incorporated as a joint stock corporation (public limited company), with its registered office in Zurich, Switzerland. Credit Suisse (Schweiz) AG is a wholly-owned subsidiary of Credit Suisse AG and Credit Suisse AG is a wholly-owned subsidiary of Credit Suisse Group AG (the Group), both domiciled in Switzerland.
A ‘material weakness’ is often referred to as failure in internal control over financial reporting, or a combination of weaknesses, that makes it likely that a major falsification of the company’s annual or interim financial statements won’t be stopped or caught in time.
Meanwhile, Reuters reports that Saudi National Bank cannot give more money to Credit Suisse as it cannot go above 10% ownership due to a regulatory issue, SNB’s chairman Ammar Al Khudairy told Reuters on Wednesday.