APC 2014 Annual Report Download - page 168

3CORPORATE GOVERNANCE
INTERNAL CONTROL AND RISK MANAGEMENT
Internal Audit Department
validates changes. The 2014 Key Internal Controls campaign
results have been presented to the Responsibility & Ethics
The Internal Audit Department contributes to the analysis and to Committee and have shown a significant improvement in the
strengthening the internal control system by: number of entities complying with our minimum requirements (see
chapter Ethics & Responsibility, page62).
mapping general risks;
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The committee also establishes a framework for actions to be
verifying the effective application of Key Internal Controls during
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taken on three components of the program: prevention,
audit assignments;
investigation and control.
reviewing the audited unit’s internal control self-assessment and
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related action plans.
Fraud Committee
The audit assignments go beyond the Key Internal Controls, and
include an in-depth review of processes and their effectiveness. The Fraud Committee defines the policy against fraud and the
Internal Audit also reviews newly acquired units to assess their level process of reporting and treating fraud and suspected fraud,
of integration into the Group, the level of internal control and the including changes in procedures or practices to avoid recurrence.
effectiveness of operational processes, as well as ensuring Group The limited Fraud Committee is composed of the Group General
rules and guidelines are properly applied, and more generally Counsel & Chief Compliance Officer, head of Global Security and
compliance with the law. the head of Internal Audit & Internal Controls; it meets on a monthly
A summary overview of the department’s audits makes it possible basis as well as on ad-hoc basis.
to identify any emerging or recurring risks that require new risk It deals with cases of fraud, corruption, conflict of interest, breach
management tools and methodologies or adjustments to existing of procedure, theft and related matters. All reported cases of fraud
resources. are reported to the Fraud Committee.
In2014, Internal Audit performed 27 audits, including: The Fraud Committee decides on investigations that are managed
audits of units;
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either locally by the Compliance Officer, or centrally by a member
audits of a number of risks or operating processes;
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of the Fraud Committee depending on the seriousness of the
incident and the level of management potentially involved. The
post-acquisition audits for newly acquired companies;
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Fraud Committee ensures the implementation of the action plan,
analyses of internal control self-assessments by the audited
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the appropriate sanction as well as feedback for each proven case
units; of fraud. A report is written and updated regularly for this purpose.
follow-up audits to ensure recommendations are applied;
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The Fraud Committee presents an annual summary report to the
assistance assignments.
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Audit Committee.
Responsibility and Ethics Committee
The committee on Ethics and Responsibility steers action in
relation to the Principles of Responsibility, updates them and
Internal control procedures governing the production and processing of 9.6
consolidated and individual company accounting and financial information
In addition to: November30, of each year so that most closing adjustments for
the period can be calculated in advance;
its regulatory tasks;
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the scope of consolidation as well as the Group’s interest and
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its responsibility for overseeing the close of accounts across the
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the type of control (exclusive control, joint control, significant
Group; influence,etc.) in each subsidiary, from which the consolidation
its audits of the Group's results with respect to set targets (see
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method results are determined in cooperation with the Legal
«Internal Control Organization and Management: Finance and Affairs Department;
Control – Legal Affairs Department»). the Management Control and Accounting unit issues
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The Management Control and Accounting unit is tasked with instructions to the units on the closing process, including
overseeing: reporting deadlines, required data and any necessary
adjustments;
the quality of reporting packages submitted monthly by
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subsidiaries; the Group's consolidated financial statements are analyzed in
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detail, to understand and check the main contributions by
the results of programmed procedures;
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subsidiaries, as well as the type of transactions recorded;
the integrity of the consolidation system database.
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accounting classifications are verified;
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In addition, the Management Control and Accounting unit ensures the preparation and approval of the statement of changes in
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that: equity and the cash flow statement are the key control points.
given that the Group consolidated financial statements are
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The internal controls used to confirm the existence, completeness
finalized a few weeks after the annual and half-year balance and value of assets and liabilities are based on:
sheet date, subsidiaries perform a hard close at May31, and
166 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC