Audi 2010 Annual Report Download - page 176

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This broad-based policy is designed to increase risk transparency and risk awareness at the Com-
pany. An ongoing structured dialog between Central Risk Management and the non-central risk
managers seeks to boost the effectiveness of the early warning system for risks. Meanwhile this
continuing dialog promotes an open risk culture within the Audi Group.
Greater transparency makes it easier to manage risks effectively and promotes the stability of
the business model. It thus helps to ensure that the strategic corporate objectives are achieved.
Central Risk Management, together with the compliance organization, reports to the Board of
Management and Supervisory Board on an ongoing basis and thus supports the strategic decision-
making process in the Company. The risks identified in the Audi Group and the corresponding
countermeasures adopted are an integral part of corporate planning and management.
Integrated internal control and risk management system for the financial
reporting process
Particular importance is attached to the integrated internal control and risk management system
for the financial reporting process.
The aim of this control system is to minimize the risk of misstatements both in the bookkeeping
and in external reporting. The internal control process for financial reporting purposes for the
Financial Statements of the Audi Group thus comprises those measures that ensure the prompt,
complete and accurate communication of the information needed for the preparation of the
Consolidated Financial Statements and Group Management Report.
Within the Audi Group, the accounting system is fundamentally decentralized. In individual
instances AUDI AG takes charge of accounting tasks on behalf of subsidiaries on the basis of
service agreements. The individual financial statements of AUDI AG and its subsidiaries are
prepared in accordance with the national regulations applicable in each case. For AUDI AG, the
fully consolidated Group companies and the equity investments, these are then reconciled with
IFRS financial statements. A commercial encryption product is then used to assure data security
for subsequently forwarding them to Audi Group Accounting.
The Group accounting guideline maintains uniformity in the recognition and measurement prin-
ciples based on the IFRS rules applicable to the parent company.
These and other Group-wide accounting standards thus regulate in detail both the reporting
scopes for AUDI AG and the Group companies, and the consolidated companies included in the
Consolidated Financial Statements, as well as the application of statutory requirements. Specific
requirements for the reporting and treatment of intra-Group business transactions and for the
reconciliation of balances on that basis as well as specific subjects to be covered by the Group
companies are furthermore defined.
At Group level, the individual financial statements prepared by the subsidiaries are evaluated
and discussed. In addition to the reports prepared by the independent auditors, the findings of
the concluding discussions with representatives of the individual companies covering both the
plausibility of the individual financial statements and individual matters concerning the subsidi-
aries are considered at this point.
A clear separation between spheres of responsibility and use of the “dual control principle” as well
as plausibility checks are other significant instruments of control that serve as the basis for the
preparation of the Group companies’ individual financial statements. Group Auditing in addition
conducts examinations to support the internal control process for financial reporting purposes.
Group Accounting at AUDI AG has used the Volkswagen Consolidation and Corporate Steering
System (VoKUs) in close consultation with Volkswagen AG, Wolfsburg, since 2009. This system
permits the consolidation and analysis of data from Accounting and Controlling. It therefore
constitutes a future-proof technical platform that will assure a uniform reporting system and