Porsche 2009 Annual Report Download - page 102

Main features of the integrated internal control
and risk management system relevant for the
financial reporting process
The Volkswagen group’s accounting is organ-
ized along decentralized lines. In some cases, ac-
counting duties at individual subsidiaries are trans-
ferred to service providers. The separate financial
statements of Volkswagen AG and the subsidiaries are
prepared in accordance with the applicable national
laws, reconciled to IFRSs and transmitted to the group
in encrypted form. A standard market product is used
for encryption.
The group accounting manual ensures the
application of uniform accounting policies based on
the requirements applicable to the parent. This man-
ual and other group-wide accounting regulations stipu-
late specific formal requirements to be met by the
consolidated financial statements prepared in accor-
dance with IFRSs, in addition to the rules applicable to
the financial statements of Volkswagen AG prepared
in accordance with the German Commercial Code
(HGB). In particular, these include more detailed guid-
ance on the application of legal requirements and the
determination of the entities to be included in the
consolidated financial statements. Components of the
reporting packages required to be prepared by the
group companies are also set out in detail and re-
quirements established regarding the presentation
and settlement of intragroup transactions and the bal-
ance reconciliation process that builds on that.
Control activities at group level include ana-
lyzing and, if necessary, adjusting the separate financial
statements presented by subsidiaries, taking into ac-
count the reports submitted by the auditors and the
meetings on the financial statements with representa-
tives of the individual companies, at which both the rea-
sonableness of the separate financial statements and
specific critical issues at the subsidiaries are dis-
cussed. Alongside reasonableness reviews, the clear
delineation of areas of responsibility and the applica-
tion of the dual control principle are further control
mechanisms applied during the preparation of the fi-
nancial statements of Volkswagen AG.
In addition, the financial reporting-related in-
ternal control system is independently reviewed by
group internal audit in Germany and abroad.
Integrated consolidation and planning system
Since February 2009, group financial report-
ing has been using a new system, the Volkswagen
consolidation and corporate management system
(VoKUs), which is currently being extended to include
planning functions. The aim of the project as a whole is
to create a highly efficient, integrated group system
that can be used to consolidate and analyze both fi-
nancial reporting’s backward-looking data and control-
ling’s forward-looking data. On the basis of centralized
master data management, standardized reporting and
maximum flexibility with regard to changes to the le-
gal environment, Volkswagen is building a future-proof
technical platform that will benefit group financial re-
porting and group controlling in equal measure. To
verify data consistency, VoKUs has a multi-level valida-
tion system that focuses on checking the complete-
ness of the data delivered and carrying out content
plausibility checks between the balance sheet and the
income statement. To enable further plausibility checks
to be performed, VoKUs supports materiality analyses
and data screening for anomalies.
102 Group management report