Lenovo 2013 Annual Report Download - page 57

2012/13 Annual Report Lenovo Group Limited 55
To enhance the monitoring of controls, Lenovo recognizes the importance of self testing of key controls by management
in order to ensure that the internal controls are working as intended or that necessary actions have been taken to address
control weaknesses. To further assist management with monitoring controls Lenovo has established a Global Business
Process & Controls organization. As part of its mission, the Global Business Process & Controls organization helps to
clearly communicate control requirements across all organizations and process owners, design processes, and evaluate
the operating effectiveness and efficiency of designed processes and controls in order to help to mitigate risk.
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. The mission of Internal Audit is to provide the Board of Directors and Lenovo management
with:
• Independent and objective assessment of Lenovo’s system of internal controls;
• Guidance in managing and controlling risks for Lenovo stakeholders;
• Proactive support to improve Lenovo’s control posture; and
• Independent investigations regarding allegations of fraud and violations of Lenovo’s Code of Conduct and other
company policies.
To enable it to fulfill its mission, 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. To help ensure the quality of the Internal Audit function and provide assurance that the Internal Audit function is
in conformity with the standards of the Institute of Internal Auditors, Internal Audit has implemented a comprehensive and
continuous quality assurance program covering all Internal Audit activities. In addition, the Audit Committee periodically
commissions an independent, external quality assurance review of the Internal Audit function.
In selecting the audits to perform each year, Internal Audit uses information collected throughout the year from process
owners, the risk assessment team, senior executives, external auditor and the Board. Using this information Internal Audit
develops a risk based audit plan, focusing on areas with significant risks or where substantial changes have been made.
The audit plan is reviewed by the Audit Committee, which is also given quarterly updates on the performance of the plan
and key findings. From the audit work performed, process owners are able to confirm to senior management that internal
controls are working as intended or that necessary corrections have been made where control weaknesses have been
found. In keeping with best practices, Internal Audit regularly monitors the status of management action plans with respect
to audit findings to ensure completion and reports to the Audit Committee. Reporting also includes identified key controls
issues as well as potential controls issues in order to provide the Audit Committee full visibility into the status of Lenovo’s
control environment. Ad hoc reviews of areas of concern identified by management or the Audit Committee may also be
performed. During the last year, Internal Audit issued multiple reports covering all significant operational and financial units
worldwide.
Furthermore, Internal Audit is responsible for investigating any allegations of potential violations of Lenovo’s Code of
Conduct, the Anti-Bribery and Anti-Corruption Policy, or any other company policies as appropriate. Internal Audit partners
with Legal, Ethics and Compliance, Human Resources, and subject matter experts where necessary to ensure the
appropriate expertise when performing these investigations. Management and the Audit Committee are informed of any
required actions resulting from these reviews, and Internal Audit monitors the corrective actions to completion.