Audi 2010 Annual Report Download - page 177

175
Management Report
132 Audi Group
141 Business and underlying
situation
156 Financial performance
indicators
159 Social and ecological aspects
173 Risks, opportunities
and outlook
173 Risk report
179 Report on post-balance sheet
date events
179 Report on expected
developments
183 Disclaimer
the greatest possible flexibility of response to changes in the legal framework, as well as a central
system for master data management. Group Accounting and Group Controlling benefit from it in
equal measure.
To minimize potential sources of error within the financial reporting process, VoKUs offers vari-
ous additional functions. These include a multi-stage validation system for data consistency that
in essence has the purpose of checking the completeness of the incoming data material and
cross-checking the content of the Balance Sheet and Income Statement. VoKUs also assists with
the conducting of other plausibility checks on the data material.
Risk documentation
The risk exposure of the Audi Group is documented in line with the statutory requirements. Appro-
priate risk surveys are sent out by Central Risk Management to the risk managers of the individual
AUDI AG divisions and subsidiaries from which considerable risks to the parent company could
spread.
For each identified individual risk the probability, an assessment of the potential loss, the risk
management instruments and their effectiveness are determined.
The plausibility and appropriateness of the risk reports are examined by Central Risk Management.
Talks involving the independent auditors are also held on a case-by-case basis. Based on the risk
reports, Central Risk Management compiles a risk profile for the Audi Group.
In their examination the independent auditors assess whether the Board of Management has
taken the measures incumbent upon it as defined in Section 91, Para. 2 of the German Stock
Corporation Act (AktG) in an appropriate manner, and whether the monitoring system to be set
up under this act is fit for purpose.
The Audi Group thus satisfies the requirements of German corporate governance legislation
(KonTraG). The requirements under KonTraG are furthermore gradually incorporated into
reporting to comply with the new German Accounting Law Modernization Act (BilMoG).
Ongoing examination and refinement
The processes of the internal control and risk management system within the Audi Group are
continually being revised and optimized. The recommendations of internal audits and the inde-
pendent auditors are also incorporated, as independent bodies monitoring their correctness and
effectiveness.
Individual risks
The business activities of the Audi Group involve a wide variety of risk areas, which are explained
in greater detail below. The risks described relate to the period 2011 to 2013.
Economic risks
As a globally active company, the Audi Group is highly dependent on the development in the
global economic framework. The sales markets that are of major importance to the Company –
Europe, North America, China and Japan – are especially relevant in this respect.
In the past fiscal year the global economy recovered with surprising vigor from the consequences
of the global financial and economic crisis. The performance of individual car markets was dis-
tinctly mixed and volatile. Whereas car markets particularly in Asia, Latin America and the United
States achieved high growth rates, demand in Western European auto markets remained pre-
dominantly slack. The expiry of state aid programs in various Western European countries proved
a particular burden. Although premium manufacturers were only marginally affected by the
impact of state aid, demand for premium-segment vehicles remains exposed to certain risks
because of the high volatility in car markets that has been observed.