Operations and Business Environment - Fresenius Medical Care

02. 4
Our Fiscal Year
96
Our internal controls over financial reporting ensure
compliance with applicable accounting standards. This
system is based on automated and manual controls,
a segregation of duties, and the use of guidelines and
operational mandates. Furthermore, our internal audit
as well as assessments ensure that risks directly
related to financial reporting are identified and that
controls are in place to manage these risks. To stay
abreast of changes in accounting standards and to
continuously train people responsible for the preparation
of financial information.
The Committee of Sponsoring Organizations of the
Treadway Commission’s ”Internal Control Integrated
Framework (COSO framework)” forms the basis for
evaluating the effectiveness of our internal control
system for financial reporting. Following the COSO
framework, our internal financial reporting control system
is divided into five levels and evaluated accordingly.
In addition to the control activities, the control
environment, information and communication paths,
monitoring of the internal control system and risk
evaluation are documented, tested and assessed. Our
review of the internal control system of financial reporting
follows the standards of the Public Company
Accounting Oversight Board (PCAOB) in the U.S.
The Management Board’s assessments are based on
the work done by regional project teams. The management
assesses the effectiveness of the internal control
system for each fiscal year and publishes its findings in
the Annual Report. External advisers are consulted as
needed. A steering committee led by our Chief Financial
Officer meets regularly to discuss changes and new
requirements of the Sarbanes-Oxley Act, as well as
potential weak points in our system, and implement
further measures. In addition, the Audit Committee of
the Supervisory Board reviews the results of the
Management Board’s assessment on a regular basis.
As of December 31, 2006, management conducted an
assessment of the effectiveness of the Company’s internal
control system for financial reporting. With this
assessment, management determined that the Company’s
internal control system for financia reporting was
effective as of December 31, 2006. Management’s
assessment of the effectiveness of the Company’s internal
control system for financial reporting, as well as the
effectiveness of the internal control system for financial
reporting as of December 31, 2006, have been audited
by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, an independent
registered public accounting firm. For further details
see page 106 of the financial report.
Risk Areas
The main risk areas for the business activities of the
Fresenius Medical Care Group are as follows:
Risks due to Economic Conditions
The economic development of corresponding markets
only indirectly affects the risk situation of individual
business segments. However, our international business
is influenced by fluctuations in foreign currency exchange
rates, leading us to carefully monitor and
assess the development of the global economy as well
as political, legal and financial conditions. The international
strategy of the Fresenius Medical Care Group
also makes it essential for us to conduct continuous,
intensive analyses of country-specific risks.
Risks Related to the General Economic Environment
From today’s point of view, the global economy presents
no substantial danger to the Fresenius Medical
Care Group. For 2007, we expect positive economic
development at the level of 2006.
Fresenius Medical Care 2006