Reebok 2013 Annual Report Download - page 166

adidas Group
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2013 Annual Report
Group Management Report – Financial Review
162
2013
Risk and Opportunity Report
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03.5
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The accounting for Group companies is conducted either locally or by
an adidas Group Shared Service Centre. Most of the IT ERP systems
used are based on a Group-wide standardised SAP system. Some Group
companies use Navision-based ERP software. As part of an initiative
aimed at harmonising our system infrastructure (One ERP), we will also
introduce an SAP-based ERP system within these Group companies
in the medium term. Following approval by the Finance Director of
the respective Group company, the local financial statements are
transferred into a central consolidation system based on SAP SEM-BCS.
At Group level, the regularity and reliability of the financial statements
prepared by Group companies are reviewed by Group Accounting and
Controlling. These measures include automated validation in the system
as well as creation of reports and analyses to ensure data integrity and
adherence to reporting logic. In addition, differences between current
year and prior year financial data as well as budget figures are analysed
on a distribution channel and market level. If necessary, the Group seeks
the opinion of independent experts to review business transactions
that occur infrequently and not on a routine basis. After ensuring data
plausibility, the centrally coordinated and monitored consolidation
process begins, running automatically on SAP SEM-BCS. Controls
within the individual consolidation steps, such as those relating to the
consolidation of debt or of income and expenses, are conducted both
manually and system-based, using automatically created consolidation
logs. Any inadequacies are remedied manually by systematically
processing the individual errors and differences and are reported back
to the Group companies. After finalisation of all consolidation steps, all
items in the consolidated income statement and in the consolidated
statement of financial position are analysed with respect to trends and
variances. Unless already otherwise clarified, the Group companies are
asked to explain any identified material deviations.
All financial systems used are protected against malpractice by means
of appropriate authorisation concepts, approval concepts and access
restrictions. Access authorisations are reviewed on a regular basis
and updated if required. The risk of data loss or outage of accounting-
related IT systems is minimised by Group IT through central control
and monitoring of virtually all IT systems, centralised management of
change processes and regular data backups.
Focus on advancements in compliance management
system in 2013
In 2013, we further enhanced the Group’s governance structures
and processes with a particular emphasis on the Group’s compliance
management system. We launched the adidas Group Fair Play Compliance
Framework, which is applicable to the whole Group regardless of
brand, market, distribution channel or function. This included the
implementation of the global Fair Play hotline and email service, the
creation and introduction of a global reporting solution for potential
incidents of non-compliance as well as a worldwide communication
and education initiative via brochures and posters at all adidas Group
locations, including offices, own-retail stores and distribution/logistics
centres. We also further activated the global network of Compliance
Officers, providing training on a global, regional and local level. Regarding
risk and opportunity management, the Group Risk Management
department held numerous training sessions and workshops with Risk
Owners as well as functional and market management teams worldwide
(e.g. Greater China, Russia/CIS) to further strengthen the understanding
of the Group’s risk and opportunity management system, in order to
increase risk awareness and to establish a culture of risk-conscious
decision-making. In addition, we updated and adjusted our Risk
Universe and our Group Risk Management Policy, which is available to
all Group employees on our intranet. The policy outlines the principles,
processes, tools, risk areas, key responsibilities, reporting requirements
and communication timelines within our Group. Furthermore, Group
Policies & Internal Controls held the Group’s first-ever global Internal
Controls Conference, bringing together employees from various areas
of internal governance including Internal Controls, Internal Audit, Profit
Protection, Risk Management and Compliance. This event drove further
alignment worldwide and kicked off various initiatives across the Group
to further optimise and harmonise risk management, control and
compliance activities.