Unilever 2006 Annual Report Download - page 70

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Unilever Annual Report and Accounts 2006 67
Financial Statements (continued)
Statement of Directors’ responsibilities (continued)
Unilever’s corporate internal audit function plays a key role in
providing an objective view and continuous reassurance of the
effectiveness of the risk management and related control systems
throughout Unilever to both operating management and the
Boards. The Group has an independent Audit Committee,
comprised entirely of Independent Non-Executive Directors.
This Committee meets regularly with the Chief Auditor and
the external auditors.
Unilever has a comprehensive budgeting system with an annual
budget approved by the Boards, which is regularly reviewed and
updated. Performance is monitored against budget and the
previous year through monthly and quarterly reporting routines.
The Group reports to shareholders quarterly.
Unilever’s system of risk management has been in place
throughout 2006 and up to the date of this report, and complies
with the recommendations of ’Internal Control – Revised
Guidance for Directors on the Combined Code’, published by
the Internal Control Working Party of the Institute of Chartered
Accountants in England & Wales in October 2005. The Boards
have carried out an annual review of the effectiveness of the
systems of risk management and internal control during 2006
in accordance with this guidance, and have ensured that the
necessary actions have been or are being taken to address
any significant failings arising out of that review.
Based on an evaluation by the Boards, the Group Chief Executive
and the Chief Financial Officer concluded that the design and
operation of the Group’s disclosure controls and procedures as at
31 December 2006 were effective, and that subsequently there
have been no significant changes in the Group’s internal controls,
or in other factors that could significantly affect those controls.
It is Unilever’spractice to bring acquired companies within the
Group’s governance procedures as soon as is practicable and
in any event by the end of the first full year of operation.
Unilever is required by Section 404 of the US Sarbanes-Oxley
Act of 2002 to report on the effectiveness of internal control
over financial reporting. This requirement will be reported on
separately and will form part of Unilever’s Annual Report on
Form 20-F.