Annual Report 2006 ISS Global A/S

tors. The controllers perform follow-up to ensure
that the recommendations are implemented.
Other key elements of the framework constituting
ISS’s control environment are:
� Strategy reviews – annual meetings with
country managers at which the strategy is
discussed and priorities and plans for the
coming year are agreed upon
� Business reviews – monthly meetings between
regional management and country
managers with focus on the current performance
and state of the business
� Budgets and financial plans – all countries
must prepare budgets and plans for the next
financial year in a predefined format. Regional
management reviews the budgets
and plans with the countries
� Acquisitions – all acquisition proposals must
be presented in a predefined acquisition report
and valuation model for approval.
Board approval is required for large or strategic
acquisitions
� Reporting of cash flow forecasts – all countries
must report the daily cash flow forecast
for the coming month on the third working
day of each month. Subsequently, actual
figures are continuously monitored by ISS’s
Group Treasury department for deviations
from the forecasted figures
� Reporting of financial results – countries
must report a full income statement, balance
sheet, portfolio analysis etc. on a
monthly basis. Any significant variance from
budgets must be explained
� Full year forecasts – all countries must update
and report their year-end estimates
twice per year
Auditors
The Board nominates the external auditors for
election pursuant to the shareholder’s agreement.
The nomination is made after an assessment
of the competencies, objectivity and independence
of the external auditors and the effectiveness
of the audit process.
An independent business relationship with the
ISS Group’s external auditors is essential for the
control environment. As part of the safeguards
related to independence, the external auditors
may not be used for certain non-audit services
for ISS including, but not limited to, preparation
of accounting records and financial statements
and recruitment for senior management positions.
The company collaborates with its external auditors
in relation to risk management by exchanging
controller reports and audit reports, and by
generally sharing relevant knowledge.
ANNUAL REPORT 2006 / Corporate Governance
All Board members receive the external auditors’ longform
audit reports in connection with the audit of the
annual financial statements and any other long-form report.
The Board reviews the Annual Report at a meeting with
the external auditors. The potential findings of the external
auditors and any major issues that arose during
the course of the audit are discussed and key accounting
principles and audit judgments are reviewed.
19