Lenovo 2009 Annual Report Download - page 50

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CORPORATE GOVERNANCE
2008/09 Annual Report Lenovo Group Limited
48
INTERNAL CONTROL
The Board acknowledges its responsibility to ensure the Company maintains sound and effective internal controls. This
is achieved through a defined management structure with specified limits of authority and defined control responsibility
to:
• Achieve business objectives and safeguard assets against unauthorized use or disposition;
• Ensure maintenance of proper accounting records for the provision of reliable financial information for internal use
or for publication; and
• Ensure compliance with the relevant legislation and regulations.
To achieve this, the Company has established an integrated framework of internal controls which is consistent with the
COSO (the Committee of Sponsoring Organizations of the Treadway Commission) framework.
Within this framework, management performs periodic enterprise wide risk assessments and continuously monitor
and report the progress of action plans to address the key risks. They also track and report on the implementation of
strategic initiatives, business plans, budgets and financial results. As part of the focus on financial integrity, all relevant
senior executives regularly verify the accuracy and completeness of the quarterly financial statements and compliance
with key internal controls.
While management is responsible for the design, implementation and maintenance of internal controls, the Board and
its Audit Committee oversee the actions of management and monitor the effectiveness of the established controls. To
assist the Audit Committee in its oversight and monitoring activities, the Company maintains an independent worldwide
Internal Audit function which provides objective assurance to the Audit Committee that the system of internal controls is
effective and operating as intended.
Internal Audit has unrestricted access to all corporate operations, records, data files, computer programs, property, and
personnel. To preserve the independence of the internal audit function, the Head of Internal Audit reports directly to the
Audit Committee on all audit matters and to the Chief Financial Officer on administrative matters. The Head of Internal
Audit is authorized to communicate directly with the Chairman of the Board and other Board members.