Reebok 2014 Annual Report Download - page 165

Group Management Report – Financial Review
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2014
Risk and Opportunity Report
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adidas Group
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2014 Annual Report
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.
Group’s governance structures and processes enhanced in 2014
In 2014, we made further improvements to the Group’s governance structures and processes. We
launched a completely overhauled Code of Conduct (our Fair Play Code of Conduct), updated our
web-based Code of Conduct training and introduced a Fair Play mobile phone application available
for download for the Group’s employees. Regarding risk and opportunity management, the Group
Risk Management department held training sessions and workshops with Risk Owners and
revamped the Risk Universe after benchmarking the Group’s risk and opportunity categories with
those reported by the Group’s main competitors and retail partners.