ANNUAL REPORT 2016
55. Main elements of the internal control systems and risk management
implemented by the company regarding the finantial disclosure process
The Company does not have any internal audit services reporting directly to the Audit Commit-
tee (given the Latin model adopted), the necessary compliance services being overseen by the
individual departments of the company. Organizationally and functionally, the various units
of the Group are directly responsible for compliance services to the Board of Directors and of
the Audit Committee and the persons responsible are duly identified in the Company’s organ-
ization chart. Under the Latin model of corporate governance, the individual departments of
the Company oversee the compliance services in interaction with the Audit Committee or the
non-executive director of the Company, reporting functionally to that director, independently
of the departments’ reporting relationship with the Company’s executive management.
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 effec-
tiveness of the separation between the persons who prepare the information and those who
use it and carrying out various validation procedures throughout the financial information
preparation and disclosure process.
The external auditor meets with the different departments 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 discussion 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 Company are considered to have access to inside information and are
specially informed of their obligations.
The system of internal control of the recording, preparation and disclosure of financial infor-
mation 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 control system.
- The plans, procedures and records of the Company and its subsidiaries offer a reasona-
ble guarantee that only duly authorized transactions are are recorded and that they are
recorded in accordance with generally accepted accounting principles.
- The financial information is analysed systematically and regularly by business unit man-
agement (supported by the Management Control Department) and by the heads of the
profit centres, ensuring continuous monitoring and the necessary budgetary control.
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