entire - Deutsche Bank Annual Report 2012

Deutsche Bank 01 – Management Report 122
Financial Report 2010 Internal Control over Financial Reporting
Measuring effectiveness of internal control
Each year, management of the Group undertakes a formal evaluation of the adequacy and effectiveness of
ICOFR. This assessment as of December 31, 2010 excludes internal controls relating to Deutsche Postbank
AG, which was initially consolidated on December 3, 2010. This evaluation incorporates an assessment of the
effectiveness of the control environment as well as the detailed controls taking into account:
— The financial misstatement risk of the relevant financial statement item, considering such factors as materiality
and the susceptibility of the particular financial statement item to misstatement.
— The susceptibility of the control to failure, considering such factors as the degree of automation, complexity,
risk of management override, competence of personnel and the level of judgment required.
These factors, in aggregate, determine the nature and extent of evidence that management requires in order to
be able to assess whether or not the operation of the system of ICOFR is effective. The evidence itself is generated
from procedures integrated with the daily responsibilities of staff or from procedures implemented specifically
for purposes of the ICOFR evaluation. Information from other sources also form an important component
of management’s evaluation since such evidence may either bring additional control issues to the attention of
management or may corroborate findings. Such information sources include:
— Group Audit reports
— Reports on audits carried out by or on behalf of regulatory authorities
— External Auditor reports
— Reports commissioned to evaluate the effectiveness of outsourced processes to third parties
The result of management testing subject to the exclusion noted and the information from other sources lead to
the conclusion of management that ICOFR is appropriately designed and operating effectively for 2010.
In addition, Group Audit provides assurance over the design and operating effectiveness of ICOFR by performing
periodic and ad-hoc risk-based audits. Reports are produced summarizing the results from each audit performed
which are distributed to the responsible managers for the activities concerned. These reports, together with the
evidence generated by specific further procedures that Group Audit performs for the purpose provide evidence to
support the annual evaluation by management of the overall operating effectiveness of the ICOFR.