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External audit assesses and reports on the reliability
and integrity of accounting and financial information,
validating the internal control system established
in the Group and the effectiveness of the separation
between the persons who prepare the information
and those who use it and carrying out various valida-
tion procedures throughout the financial information
preparation and disclosure process.
The external auditor meets with the different depart-
ments of the Group, at least twice a year to analyze
and review the internal control system, submitting a
report to the Audit Committee for subsequent discus-
sion with the Board of Directors, namely with the non-
executive director.
As regards risk in the process of financial information
disclosure, only a restricted number of employees is
involved in the disclosure process. All those who are
involved in the process of financial analysis of the Com-
pany are considered to have access to inside informa-
tion and are specially informed of their obligations.
The system of internal control of the recording, prepa-
ration and disclosure of financial information rests on
the following key elements:
- the use of accounting principles, as set forth in the
notes to the accounts, is one of the bases of the con-
trol system;
- the plans, procedures and records of the Company
and its subsidiaries offer a reasonable guarantee
that only duly authorized transactions are recorded
and that they are recorded in accordance with gener-
ally accepted accounting principles;
- the financial information is analysed systematically
and regularly by business unit management (support-
ed by the Management Control Department) and by
the heads of the profit centres, ensuring continuous
monitoring and the necessary budgetary control;
- a timetable is established for the preparation and re-
view of information, the work is divided up among
the various areas involved and all the documents
are reviewed in detail. This includes a review of the
principles used, verification of the accuracy of the in-
formation produced and a check of consistency with
the principles and policies used in previous years;
- the accounting records and the preparation of the
financial statements are overseen by the central ac-
counting function. The financial statements are pre-
pared by the accountants and are reviewed by the
Administrative Unit;
- The consolidated financial statements are prepared
on a quarterly basis by the central consolidation
function, which conducts an additional reliability
check;
- The financial information, annual report and finan-
cial statements are reviewed by the Financial Unit
and submitted to the Board of Directors for final re-
view and approval. Once the documents have been
approved, they are sent to the external auditor,
which issues its audit report and opinion;
- The statutory auditor carries out an annual audit and
a half-yearly limited review of the individual and con-
solidated accounts. Also, each quarter it conducts a
summary examination of the quarterly information;
