Tiscali 2009 Annual Report Download - page 69

Tiscali Group: Annual Report 2009
68
Internal checking relating to accounting and financial information
The internal Audit System on company information must be understood as a process which, as it involves
several company functions, provides reasonable assurances about the reliability of the financial information,
the fairness of the accounting documents and compliance with the applicable regulations.
The correlation with the process of risk management is close and clear, and is configured as the process
of identifying and analysing those factors that might prejudice the attainment of corporate goals, with the
scope of determining how those risks can be handled. An ideal and effective risk management system can
in fact mitigate any negative impact on company goals, amongst which are the reliability, accuracy, fairness
and timeliness of the accounting and financial information.
Description of the main features of the risk management system and internal controls in existence with
regard to the financial information process
A) Description of the main features of the risk management system and internal controls in existence
with regard to the financial information process
Identifying risks on financial information
The work of identifying risks is carried out first and foremost by the selection of relevant entities (companies)
at group level and, later, by the analysis of risks that reside along the corporate processes from which the
financial information originates.
This work includes: i) defining the quantitative criteria with regard to the income and asset contributions
provided by individual companies in the last accounting position and the rules for selection with internal
relevance thresholds. Considering qualitative elements is not excluded: ii) Identifying significant processes,
associated to material data and information, that is accounting items for which a possibility exists that is not
remote for the containment of errors with a potential significant impact on financial information.
For each significant account the identification of the most relevant ‘statements” is made, in constant
compliance with assessments based on risk analysis. The account statements are represented by the
existence, completeness, needfulness, valuation, by rights and obligations and by presentation and
information. Risks thus refer to the possibility that one or more account statements may not be correctly
represented, with a consequential impact on the information itself.
Identifying risks on financial information
The assessment of risks is carried out both on an overall company basis and at the level of specific processes.
The first sphere includes the risks of fraud, of incorrect functioning of the computer systems or other
unintentional errors. At a process level, the risks connected with financial information (underestimation,
overestimation of items, inaccuracy of information, etc.) must be analysed at the level of the activities that
make up the processes.
Identifying checks when faced with identified risks
First of all attention is given to the checks at corporate level, which can be connected to information/data
and to the related statements, which must be identified and assessed both through the monitoring of the
reflection at the process and at a general level. Checks at corporate level are aimed at preventing, identifying
and offsetting any significant errors, even if not operating at a process level.