APC 2013 Annual Report Download - page 162

3CORPORATE GOVERNANCE
INTERNAL CONTROL AND RISK MANAGEMENT
Internal control and risk 9.
management**
Definition and objectives of internal control and risk management 9.1
Definition and objectives
Jointly controlled subsidiaries are subject to all of the controls
described below, with the exception of self-assessments of the
The Group’s internal control procedures are designed to ensure: implementation of Key Internal Controls (see “Operating Units”
below).
compliance with laws and regulations;
l
Internal control reference documents
application of instructions and guidelines issued by Senior
l
Management;
the proper functioning of the company's internal processes,
l
The Group’s internal control system complies with the legal
notably as concerns asset preservation; obligations applicable to companies listed on the Paris stock
the reliability of financial reporting; and more generally, internal
l
exchange. It is consistent with the reference framework laid down
control helps the Group manage its businesses, run efficient by the Autorité des Marchés Financiers (French Financial Markets
operations and use its resources efficiently. Authority – AMF) on internal control and risk management.
Internal control aims to prevent and manage risks related to the The internal control process is a work in progress; procedures are
Group’s business. These include accounting and financial risks, adapted to reflect changes in the AMF recommendations and the
the risk of fraud, as well as operating, financial and compliance business and regulatory environment, as well as in the Group’s
risks. However, no system of internal control is capable of organization and operations.
providing absolute assurance that these risks will be managed
Information used to prepare this report
completely.
Scope of this report
This report was prepared using contributions from the Group’s
Internal Audit and Internal Control Departments, the Management
The system is designed to cover the Group, defined as the Control and Accounting Departments, as well as the various
Schneider ElectricSA parent company and the subsidiaries over participants in internal control. It was reviewed by the Audit
which it exercises exclusive control. committee.
Organization and management: Internal Control key participants 9.2
In 2013, the Group's organizational chart rests on Senior reviews cover business trends, action plans, current results and
Management for Global Functions and Operating Divisions; defined forecasts for the quarters ahead.
in terms of businesses, geographical location, logistical or industrial Similar reviews are carried out at different levels of the Group prior
responsibility. to Senior Management’s quarterly review.
The Group’s corporate governance bodies supervise the
Internal Audit Department
development of the internal control and risk management systems.
The Audit committee has particular responsibility for monitoring the
system’s effectiveness (see Committees of the board, Chapter3 The Internal Audit Department reports to Senior Management. It
Section4). had an average headcount of 16 people in 2013. The internal
Each manager is responsible for monitoring internal control in his auditors are responsible for ensuring that, at the level of each unit:
or her area, at the different levels of the organization, as are all key the identification and control of risks;
l
internal control participants, in accordance with the tasks significant financial, management and operating information is
l
described below. accurate and reliable;
Senior Management
compliance with laws and regulations and with the Group’s
l
policies, standards, procedures;
compliance with the instructions of the head of the Group;
l
Senior Management is responsible for designing and leading the
overall internal control system, with support from all key acquisition of resources at a competitive cost, and
l
participants, in particular the Group Internal Audit and Internal theirprotection;
Control Departments. correct integration and control of acquisitions.
l
It also monitors the Group’s performance, during quarterly reviews Annual internal audit plans are drawn up based on risk and control
with the Operating Divisions and Global Functions. These quarterly concerns identified by Senior Management, taking into account the
160 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC