Loreal 2011 Annual Report Download - page 67

65REGISTRATION DOCUMENT − L’ORÉAL 2011
Corporate governance
2
Internal Control procedures (Report of the Chairman of the Board of Directors onInternal Control)
Economic Affairs Department, through a representation letter
that they jointly sign.
The Audit Committee
The role and tasks of the Audit Committee are described above
in paragraph2.2.2.1.2. on page43 of this report. These tasks are
in compliance with the French ordinance of December2008
on the conditions of application of the 8thEuropean Directive
on statutory audits of accounts and are based on the report
by the working group on the Audit Committee published by the
AMF on July22nd, 2010.
2.5.4.3. Processes used to prepare
accounting and financial
information
Operational processes contributing to accounting
figures
All of the processes that contribute to accounting figures,
particularly sales and purchases, and inventory, fixed asset,
payroll and treasury management are covered by specific
procedures, follow-up checks and rules for validation,
authorisation and booking operations.
Closing of the accounts, consolidation
andManagement Reporting information
The accounts closing process is governed by precise instructions
and is based on a detailed time schedule circulated to all
the subsidiaries to make sure that deadlines are met and the
financial statements are prepared in a consistent manner.
For the preparation of the consolidated financial statements,
validation procedures apply to each stage of the process of
reporting and processing information. Their purpose is to verify
in particular that:
♦inter-company transactions are correctly adjusted and
eliminated (these are reported on a monthly basis);
♦consolidation operations are checked;
♦accounting standards are correctly applied;
♦the consolidated published accounting and financial
data is harmonised and properly determined and general
accounting data and Management Reporting figures used
in the preparation of the financial information are consistent.
Financial communication
Managers in charge of financial communication prepare a
precise timetable for publication of up-to-date information on
the Group to the financial markets. This timetable complies
with the requirements of market authorities. These managers
ensure, with the assistance of the Legal Department, that
communications are made within the required deadlines and
in accordance with laws and regulations, which they constantly
monitor.
Their role is also to publish, precisely and accurately, the
information provided by the Economic Affairs Department
and the Legal Department. All material information provided
to the financial community reflects with truth and transparency
the situation and activity of the Group and is carried out in
accordance with the principle of equal provision of information
to all shareholders.
The Statutory Auditors
All accounting and financial information prepared by
consolidated subsidiaries is, at a minimum, subjected to a
limited review at the time of the half-year closing process and
to a full audit at year-end, by the external auditors. Twice a
year, the Managing Director and the Finance Director of each
consolidated subsidiary make a joint commitment as to the
true and fair view, reliability and completeness of the financial
information by jointly signing a representation letter.
Audit assignments in the countries in which the Group operates
are almost all entrusted to members of the networks of the two
Statutory Auditors who, after having jointly performed the review
of all the Group’s accounts and the manner in which they were
prepared, are responsible for issuing an opinion on the Group’s
consolidated financial statements. The Statutory Auditors issue
an opinion as to whether the consolidated financial statements
and parent company financial statements give a true and fair
view. They are kept informed from the early stages of preparation
of the financial statements and present an overview of their
work to the Group’s accounting and finance managers and
to the Audit Committee at the time of the half-year and annual
closing.