APC 2013 Annual Report Download - page 168

3CORPORATE GOVERNANCE
INTERNAL CONTROL AND RISK MANAGEMENT
Internal Control Department
Internal Audit also reviews newly acquired units to assess their level
of integration into the Group, the level of internal control and the
Internal Control continued to deploy the Key Internal Controls effectiveness of operational processes, as well as ensuring Group
–training and requests for self-assessments– throughout the rules and guidelines are properly applied, and more generally
Operating Divisions, with the scope extended to cover new units: compliance with the law.
more than 50% of the deficiencies identified during the 2012 A summary overview of the department’s audits makes it possible
campaign were deemed settled in2013. to identify any emerging or recurring risks that require new risk
New deficiencies were identified owing to additional Key Internal management tools and methodologies or adjustments to existing
Controls, which gave rise to further action plans. resources.
Internal Control self-assessments were received and analyzed, In2013, Internal Audit performed 26 audits, including:
which identified areas needing work in2014 as part of the process audits of units;
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of continuous improvement.
audits of a number of risks or operating processes;
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In addition to the analysis and action plans initiated by the Units post-acquisition audits for newly acquired companies;
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and Operating Divisions, similar work is being carried out in the
Global Functions. On the basis of the results obtained in their field, analyses of Internal Control self-assessments by the audited
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the various functions define and implement improvement actions units;
asneeded. follow-up audits to ensure recommendations are applied;
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The list of Key Internal Controls continues to evolve. assistance assignments.
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In 2013, the Key Internal Controls of the Control Environment
Committee on ethics and responsibility
process have been enriched extensively.
The software package for the management of self-assessment The Committee on Ethics and Responsibility steers action in
questionnaires and follow-up action plans of Internal Audit and relation to the Principles of Responsibility, updates them and
Internal Control introduced in2011 continues to be improved. validates changes. It also answers employee questions that are not
The regional internal control organization introduced in2011 now addressed in the companion guide to the Principles of
consists of 27 regional internal auditors in three regions, who: Responsibility, or that managers are unable to answer. (see
“Responsible expansion of renewable energies driving economic
perform the duties defined under the section “Organization and
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performance”, Chapter2 Section2).
management: key participants of Internal Control – Internal
Control Department” for the units in their regional scope, The Committee also establishes a framework for actions to be
covering all Operational Departments; taken on three components of the program: prevention,
investigation and control.
establish standardized procedures (e.g., for internal control
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assignments, such as control cycles, documentation, scope
Fraud committee
definition, work programs etc.), in line with Internal Audit
Department procedures;
completed more than 80 on-site inspection missions in2013 to
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The fraud committee defines the policy against fraud and the
assess the level of internal control and the adequacy of action process of reporting and treating fraud and suspected fraud,
plans, issuing the necessary recommendations when needed; including changes in procedures or practices to avoid recurrence.
in 2013, in addition to standard employee training, conducted
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The limited fraud committee is composed of the Legal Director, the
awareness raising/training on the enriched Key Internal Controls Security Director and the Internal Audit Director; it meets on a
of the Control Environment process with more than 800 monthly basis.
managers. It deals with cases of fraud, corruption, conflict of interest, breach
Internal Audit Department
of procedure, theft and related matters. All reported cases of fraud
are reported to the fraud committee.
The fraud committee decides on investigations that are managed
The Internal Audit Department contributes to the analysis and to either locally by the Compliance Officer, or centrally by a member
strengthening the Internal Control System by: of the fraud committee depending on the seriousness of the
mapping general risks;
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incident and the level of management potentially involved. The
verifying the effective application of Key Internal Controls during
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fraud committee ensures the implementation of the action plan, the
audit assignments; appropriate sanction as well as feedback for each proven case of
fraud. A report is written and updated regularly for this purpose.
reviewing the audited unit’s internal control self-assessment and
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The fraud committee presents an annual summary report to the
related action plans. Audit committee.
The audit assignments go beyond the Key Internal Controls, and
include an in-depth review of processes and their effectiveness.
166 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC