Audi 2012 Annual Report Download - page 189

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The individual financial statements prepared by our subsidiaries are evaluated at Group level. In
addition to the reports prepared by the independent auditors, the findings of the concluding
discussions with representatives of the individual companies are considered at this point. The
plausibility of the individual financial statements and critical individual matters concerning the
subsidiaries are in addition discussed.
Significant instruments of control, such as the use of the “dual control principle,” a clear separa-
tion between spheres of responsibility and systematic plausibility checks, are used in the prepa-
ration of the Group companies’ individual financial statements. In addition, Group Auditing
assures the correctness of the financial reporting process by conducting examinations of the
internal control process for financial reporting, both in Germany and abroad.
Furthermore, the Audi Group is connected to Group Accounting at Volkswagen AG, Wolfsburg,
through the joint use of the Volkswagen Consolidation and Corporate Steering System (VoKUs)
and ongoing information sharing. This approach permits the consolidation and analysis of data
from Accounting and Controlling. VoKUs also acts as a central system for master data manage-
ment and assures a uniform reporting system which offers ample flexibility if changes to the
legal framework need to be incorporated. Systematic, multi-level validation functions such as
checks for completeness as well as plausibility checks on content assure data consistency within
the financial reporting process.
Risk identification, assessment and documentation
The risk management system has the purpose of satisfying the statutory and entrepreneurial
requirements that the Audi Group faces. Statutory changes are continually observed and are
acted on promptly where relevant for the Company.
Central Risk Management draws up and implements standards and processes of risk identification
and assessment for application Group-wide.
A standardized risk inventory is carried out annually with the risk managers of the individual
divisions and the principal subsidiaries. The individual risks reported are evaluated by the “risk
owners” within the individual divisions, departments and subsidiaries to establish their proba-
bility and assess the potential loss, taking account of the existing risk management instruments
and their effectiveness. The relevance and plausibility of these reports are scrutinized with the
aid of more in-depth interviews conducted in selected divisions and subsidiaries.
In addition to attempting to render risks transparent and control them as effectively as possible,
our risk management system also encourages the departments to identify and utilize potential
opportunities.
Central Risk Management is responsible for providing the Board of Management and Supervisory
Board with proper, prompt updates on the Audi Group’s corporate risk profile, using the reporting
channels defined Group-wide. If there are short-term changes in the risk situation, the divisions
are obliged to inform Central Risk Management by means of ad hoc announcements. The next
level of the process focuses on defining preventive measures to limit losses, providing updated
communication to the corporate bodies on the risk situation and examining whether an ad hoc
announcement needs to be published.
In his examination, the independent auditor assesses whether the Board of Management has tak-
en the measures incumbent upon it as defined in Section 91, Para. 2 of the German Stock Corpora-
tion Act (AktG) in an appropriate manner, and whether the monitoring system to be imple-
mented is fit for purpose. The Audi Group thus satisfies the stock corporation and commercial law
requirements as per German corporate governance legislation (KonTraG) as well as the specifica-
tions of the 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 improved. As impartial bodies, the internal Auditing department
and external independent auditor again monitored the system’s correctness and effectiveness in
the 2012 fiscal year. The findings of their audit procedures are used in optimizing the internal
control and risk management system and reported to the Board of Management and Supervisory
Board.