Tiscali 2012 Annual Report Download - page 45

Annual financial report as at 31 December 2012
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Date File Name Status Page
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Annual Report as at 31
December 2012 45
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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 weighty correlation with the risk management process is evident, consisting in the
process for identifying and analysing those factors that might prejudice the attainment of corporate
goals; the main purpose is to determine how those risks can be handled and adequately monitored
and made innocuous as far as possible. An ideal and effective risk management system can in fact
mitigate any negative impact on company goals, amongst which the reliability, accuracy, fairness and
timeliness of the accounting and financial information.
Description of the main features of the risk management and internal control systems in
existence with regard to the financial information process
A) Stages of the risk management and internal control system 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, subsequently, by the analysis of risks that reside in 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 statement and the rules for
selection with internal relevance thresholds. Considering qualitative elements is not excluded: ii)
identifying significant processes, associated with material data and information, that is accounting
items in relation to 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, rights and obligations and 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.
Assessment of 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 in relation to identified risks
First of all attention is paid 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 repercussion 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.