Following is an excerpt from the 2014 annual report of BHP Billiton.

1. Who is responsible for internal control?
2. Why does BHP refer to the US Securities Exchange Act of 1934?
3. Why can internal controls provide only reasonable assurance that business risks will be fully mitigated?

Transcribed Image Text:

BHP Billiton Management's assessment of our internal control over financial reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the US Securities Exchange Act of 1934). Under the supervision and with the participation of our management, including our CEO and CFO, the effectiveness of the Group's internal control over financial reporting has been evaluated based on the framework and criteria established in Internal Controls - Integrated Framework, issued by the Sponsoring Organization of the Treadway Commission (COSO). Based on this evaluation, management has concluded that internal control over financial reporting was effective as at 30 June 2014. There were no material weaknesses in the Group's internal controls over financial reporting identified by management. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and, even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. BHP Billiton has engaged our independent registered public accounting firms, KPMG and KPMG LLP, to issue an audit report on our internal control over financial reporting for inclusion in the Financial Statements section of this Annual Report on Form 20-F as filed with the SEC. There have been no changes in our internal control over financial reporting during FY2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.