Annual report on corporate governance and the ownership ... - Indesit

ANNEX
Annex 1 – Main characteristics of the existing
risk management and internal control
systems in relation to the financial
<strong>report</strong>ing process pursuant
to art. 123–bis, clause 2, b), TUIF 1
1. Introduction
The risk management system cannot, indeed must not, be considered as separate from the ICS in relation
to the financial <strong>report</strong>ing process; both are parts of the same system, a system designed to ensure the
reliability 2 , accuracy 3 , trustworthiness 4 and timeliness 5 of financial <strong>report</strong>ing.
When the Investor Protection law came into force, the Group initiated a project to adjust to its provisions by
adopting specific guidelines on designing, implementing, monitoring and updating the financial <strong>report</strong>ing risk
control system.
In defining the rules and methods for developing and operating the system, reference was made to national
and international best practices (such as the CoSO Internal Control Integrated Framework, proposed by the
Committee of Sponsoring Organisations of the Treadway Commission 6 and the COBIT 7 Framework).
In this project, criteria were defined for identifying:
• the perimeter of Group companies involved, on the basis of their impact on the consolidated financial
statements;
• relevant processes in terms of potential impact on financial <strong>report</strong>ing;
1. For further details on the existing risk management and internal control system in relation to the financial <strong>report</strong>ing process
(including the consolidated accounts),see the following sections of the Report: 6 (Internal Control System), 7 (Internal Control
System), 9 (Treatment of Price Sensitive Information), 15 (Officer charged with drafting the Company’s accounting and corporate
documents).
2. Reliability (of <strong>report</strong>ing): having the characteristics of correctness and conformity to generally accepted accounting standards and
the requisites specified in laws and rules.
3. Accuracy (of <strong>report</strong>ing): having the characteristics of neutrality and precision. Information is deemed neutral if free from attempts to
influence users’ decisions to obtain a particular result.
4. Trustworthiness (of <strong>report</strong>ing): having the characteristics of clarity and completeness enabling investors to make informed
decisions. Information is deemed clear if it aids understanding the more complex aspects of the business without going to
excessive length.
5. Timeliness (of <strong>report</strong>ing): information disclosed within the legal term.
6. A private, voluntary organisation based in the United States providing guidelines for directors of public and private companies on
corporate governance, business ethics, internal control, fraud, risk management and financial <strong>report</strong>ing.
7. Control Objectives for IT and related technology is a set of rules drawn up by the IT Governance Institute, a US body whose
objective is to define and improve IT standards in businesses.
32 Report on corporate governance and ownership at 22 March 2011 on 2010