Ubisoft 2009 Annual Report Download - page 172

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3.1.3.2 The components of the internal control system
3.1.3.2.1 Organization of internal control and operating procedures
The internal control system relies on a solid foundation of autonomy and collaboration within the
Group’s teams, encouraging the alignment of goals, resources and the mechanisms deployed. It is
based on the clear identification of goals and responsibilities, a human resources policy ensuring that
resources and skill levels are sufficient, and information systems and tools that are adapted to each
team and/or subsidiary.
Each subsidiary is responsible for implementing the relevant strategies to achieve these objectives,
although the monitoring of the internal control system and risk management is highly centralized by
the functional departments.
Organization
The key parties involved in the internal control system are as follows:
 The Chief Executive Officer of Ubisoft Entertainment SA: he defines and steers Group
strategy. He is responsible for establishing the procedures and mechanisms employed to ensure both
the functioning and monitoring of the internal control system.
 The Board of Directors: The way in which this functions is described in the first section of
this report. It primarily defines the policies governing the Company’s business activities and ensures
their application. It also approves the annual and interim accounts. To this end, it has access to all
documents and reports required to perform this task. Each director may independently require
additional information from the Chief Executive Officer, who is at all times available to provide relevant
information and explanations to the Board of Directors.
 The Group’s managers and staff: the major policies and goals are decided upon by Senior
Management and passed on to the subsidiaries. Each subsidiary has its own senior management and
management team and is responsible for implementing the strategies designed to ensure that these
goals are achieved and for applying the Group internal control guidelines.
 The functional departments: in collaboration with Senior Management, they are collectively
involved in setting the key accounting, finance, legal, tax, IT and human resources policies, and
supporting the subsidiaries with their implementation. Specific visits are made to the subsidiaries in
order to carry out audits and training and to make recommendations so as to ensure that the internal
control system is sufficient.
These procedures are presented in detail in the paragraph “Control activities”.
 The finance and accounting teams: present in all subsidiaries, they are responsible for
performing analysis and control functions, including budgeting and the preparation of financial
statements.
 The Internal Audit Department: reporting to Senior Management and working with the head
office financial controllers, it carries out regular audits in the subsidiaries and verifies the quality of the
controls in order to formalize the internal control policy and implement a framework designed to
improve visibility at all levels of operational and financial practices. It analyzes risks and makes
recommendations regarding internal controls.