Porsche 2011 Annual Report Download - page 106

Opportunities and risks of significant in-
vestments
Risk report of the Porsche Zwischenholding
GmbH group
Integrated internal control and risk management
system relevant for the financial reporting
process
An internal control system is understood as
the combination of all principles, procedures and
measures in place at Porsche Zwischenholding GmbH
and the Porsche Zwischenholding GmbH group with
the objective of implementing management's deci-
sions in the organization
· to ensure the effectiveness and the efficiency of
business activities (which encompasses protecting
the asset value, including the detection and avoid-
ance of any pecuniary damages);
· on the compliance and reliability of the accounting
records;
· on compliance with the legal regulations of rele-
vance to the company.
The accounting-related internal control sys-
tem that is relevant for the financial statements of
Porsche Zwischenholding GmbH and the Porsche
Zwischenholding GmbH group is designed to ensure
the complete, accurate and timely transmission of the
information required for the preparation of the finan-
cial statements and management report of Porsche
Zwischenholding GmbH and the consolidated financial
statements and the group management report of
Porsche Zwischenholding GmbH, and to minimize the
risk of material misstatement in the accounts and in
the external reporting.
With regard to the financial reporting system
and the group financial reporting system we view as
significant the aspects of the internal control and risk
management system that can materially affect the
preparation of the consolidated financial statements
including the group management report. This con-
cerns the following elements in particular:
· Identifying the main risk categories and control
areas of relevance to the group-wide financial re-
porting process;
· Controls for monitoring the group-wide financial
reporting process and its results at the level of the
group's executive board and at subsidiary level;
· Preventative control measures in the finance and
financial reporting of the group and the subsidiaries
included in the consolidated financial statements as
well as the operational business processes which
generate significant information for the consoli-
dated financial statements together with the group
management report, including a segregation of
functions and of predefined approval processes in
relevant areas;
· Measures that ensure compliant IT-supported proc-
essing of accounting-related matters and data.
The separate financial statements of Por-
sche Zwischenholding GmbH and its subsidiaries are
prepared in accordance with the applicable national
laws, reconciled to IFRSs and transmitted to the
group. The Porsche Zwischenholding GmbH group
monitors developments in IFRSs centrally on an
ongoing basis, checks their relevance and defines
uniform, intragroup rules for implementing new ac-
counting requirements. The group accounting manual
ensures the application of uniform accounting poli-
cies based on the requirements applicable to the
parent. Components of the reporting packages re-
quired to be prepared by the group companies are
also set out in detail and requirements established
regarding the presentation and settlement of in-
tragroup transactions and the associated balance
reconciliation process.
GROUP MANAGEMENT REPORT106