2012 Sustainability Report
44
| prysmian group | 2012 Sustainability Report
Internal Audit and Internal Control
The Internal Audit Department prepares an annual audit
plan using a risk assessment approach. Risk factors
are analysed and revised every year to ensure that the
audit plan properly covers the risks to which the Group is
exposed.
Internal audit staff are given full access to all data,
documentation, information and personnel needed in order
to carry out their specific activities.
The Internal Audit Manager attends the meetings of
the Risk Management and Internal Control Committee,
reporting on matters identified by the audit work and the
improvements agreed. The status of the audit plan is also
reported, along with any proposals to amend the original
audit plan and the implementation status of previously-
agreed improvement work.
The Prysmian Group adopts a series of administrative
and accounting procedures to ensure the reliability of
the system of internal controls over financial disclosures.
The Company uses policies, procedures and operating
instructions to ensure an effective flow of information
from affiliates.
These include the Group Accounting Manual (rules for
the use and application of accounting standards), the
Administrative Processes Manual, procedures for the
creation and communication of financial information and
other procedures for preparing the consolidated financial
statements and periodic financial disclosures (including
the chart of accounts, the consolidation procedure and the
procedure for related-party transactions).
The Central Functions for the Prysmian Group are
responsible for providing the documentation to the
Affiliates. All accounting policies, procedures and rules are
available to every Affiliate via the Group's intranet. The
Affiliates also issue local policies, procedures and rules
that comply with the Company's guidelines.
The Company has adopted a centrally-coordinated system
of assessment and a certification process that ensures the
adequacy and effectiveness of the internal control system.
This includes checks on the financial reporting process in
order to meet the requirements of Law 262/05 (Investor
Protection Law).
The system was developed using the COSO framework to
identify both key risks and the principal controls needed
to mitigate them, thus ensuring that the internal control
system operates effectively. Scoping work was performed
to identify the critical processes and sub-processes
within the Prysmian Group and the key functions to be
addressed. This activity was carried out in 2011, following
the acquisition of the Draka group.
The Internal Audit Department implements the above
system at each operating company and for each process
within the Group, testing independently the effectiveness
of the key controls identified previously.
The areas for improvement identified during the audit work
are reported to the Company's senior management and to
the Risk Management and Internal Control Committee. An
action plan is also agreed with each operating company
to strengthen existing controls or rectify any specific
weaknesses.
The Internal Audit Department monitors the
implementation status of these action plans and updates
senior management and the Risk Management and
Internal Control Committee accordingly.
The Chief Executive Officer and Chief Financial Officer
of every Group operating company and the heads of
the principal central functions and departments are
responsible for maintaining an adequate internal
control system. This includes periodically checking that
the key controls identified and tested by the Internal
Audit Department, on implementation of the centrally-
coordinated assessment system, continue to operate
effectively and efficiently. As the persons responsible,
they are requested to sign a confirmation, every six
months, that the internal control system is operating
properly. After signature, this confirmation is sent to the
CFO of the Prysmian Group, the Executives responsible
for preparing corporate accounting documents and the
Internal Audit Manager. In support of the confirmations
sent, the responsible persons must also confirm that they
have carried out specific testing to verify the operation of
key controls and have retained the documentary evidence
supporting their conclusions. This documentation must be
kept available for future examination by the independent
auditors. In order to ensure that this objective is met, each
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ECONOMIC AND FINANCIAL RESPONSIBILITY
