annual financial statement 2011 - conwert Immobilien Invest SE

Annual Financial Report 2011
Report on significant features of the internal control and
risk management system with respect to the financial
reporting process
The Executive Board is responsible for the risk management of the conwert Group. With a
view to the accountin process, risk management falls under the responsibility of the CFO,
who is operationally supported in risk management by his staff.
The ongoing internal reporting system is particularly important for a functioning risk
management in the conwert Group. Risks can thus be identified at an early stage and
countermeasures can be taken. Timely, quarterly reporting within a risk jour fixe, in which the
individual risk owners participate, forms the basis for this.
The parent company has provided uniform standards for the implementation and
documentation of the accounting process for the subsidiaries. The objective is to prevent the
risks of incomplete or incorrect financial reporting. In addition, the head office reviews the
internal reports prepared by the subsidiaries for plausibility and compares them with the
budget plans. Hence, appropriate measures can be taken rapidly in the case of deviations. In
order to maintain the process described above, the subsidiaries are required to provide
annual budgets for the following year in November of the current year. These budgets are
subject to approval by the Executive Board.
At regular meetings of the Executive Board with the regional and operating managers, the
current business development and foreseeable opportunities and risks resulting from
changed framework conditions are discussed. International accounting standards are
complemented by internal guidelines in the preparation of the consolidated financial
statements.
This ensures a consistent presentation of the subsidiaries included in the consolidated
financial statements in terms of measurement and presentation.
The cornerstones of the existing internal control system and the risk management system
with respect to the (group) accounting process at conwert Immobilien Invest SE can be
described as follows:
+ The conwert Immobilien Invest SE Group has a clearly defined structure of management
and corporate operations. Cross-departmental requirements are specified by the central
group management and administration.
+ With a view to the accounting process, the functions of the accounting department are
clearly separated from other areas such as payment transactions and group treasury.
+ The finance systems are protected against unauthorised access by IT facilities.
+ The finance systems employed use standard software wherever possible.
+ An adequate system of guidelines (accounting guidelines, payment guidelines, etc.) is in
place and is updated on a regular basis.
+ Accounting data received and passed on is checked for completeness and correctness by
the persons responsible, for example by taking random samples.
+ The four-eye principle is applied to all processes relevant to financial accounting.
+ The consolidation software MIS is used for the purpose of consolidation. For the principles
of accounting and valuation refer to the notes to the consolidated financial statements.
+ Processes relevant to accounting are audited by the (process-independent) internal audit
department on a regular basis.
The control and risk management system described ensures that all business transactions
are correctly entered, processed and evaluated in the balance sheet and included in the
146