APC 2009 Annual Report Download - page 103

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 101
CORPORATE GOVERNANCE
3
INTERNAL CONTROL AND RISK MANAGEMENT
6. Internal control procedures
governing the production and
processing of accounting and
financial information
In addition to issuing instructions and guidelines, organising period-
end procedures for closing the accounts and tracking performance
in relation to set targets (see “Internal Control organisation and
Management: Finance and Control - Legal Affairs”), the Management
Control and Accounting unit checks:
•the quality of reporting packages submitted monthly by the
subsidiaries;
•the results of programmed procedures;
•the integrity of the consolidation system database.
The Management Control and Accounting unit ensures that:
•all of the subsidiaries perform a hard close at May 31 and
November 30 of each year and the majority of consolidation
adjustments for the period are also calculated at these dates so
that the consolidated fi nancial statements can be produced 16
working days after the annual or half-yearly period-end;
•the scope of consolidation is determined and, in cooperation
with the Legal Affairs Department, the Group’s interest and voting
rights are calculated for each subsidiary based on the method of
consolidation;
•instructions are issued for the closing process, including reporting
deadlines, required data and any necessary adjustments;
•the Group’s consolidated financial statements are analysed
in detail, to understand and check the main contributions by
subsidiaries, as well as the substance of transactions refl ected
in the accounts;
•account classifications are checked. The key control points
concern the preparation and validation of the statement of
changes in equity and the statement of cash fl ows.
Internal control procedures confi rm the existence and value of assets
and liabilities. To this end:
•each subsidiary is responsible for implementing procedures
providing an adequate level of internal control;
•internal control procedures generally consist of defi ning levels
of responsibility for authorising and checking transactions, and
segregating tasks to help ensure that all transactions are justifi ed.
In addition, integrated statutory and management reporting
systems have been developed to guarantee the completeness of
transaction data recorded in the accounts;
•all of the subsidiaries apply International Financial Reporting
Standards (IFRS) with regard to recognition principles,
measurement and accounting methods, impairment and
verifi cation;
•the Management Control and Accounting unit performs checks
and analyses.