Atari 2009 Annual Report Download - page 186

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
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(5) Assessment of the internal control of processes that have an impact on the accuracy of t he
financial information
A management oversight entity exists for each region, responsible for monitoring operating performance (revenue,
expenses, and investments) and cash flow. Overall supervision is provided by a management control unit at the Group's
principal office.
The Group's financial planning process consists of:
 A strategic phase aimed at executing the business plan;
 A budgeting phase preceded by a definition of key objectives for the year;
 A re-budgeting phase for reviewing progress achieved during the first half of the year and adjusting projections
for the full year so as to ensure that budget guidelines are complied with;
 Periodic reassessments of revenue at monthly performance monitoring meetings for regional finance teams and
the Chief Executive Officers of entities.
The Group‟s finance management conducts on-site reviews at each operating entity, including of technical performances
and risk procedures, action plans decided in connection with financial planning procedures and ad-hoc audits.
The independent auditors also report to the Group's senior management any shortfall in oversight that they may identify
during the course of their audit of the annual and interim financial statements.
Oversight is conducted at various management and line levels and includes a wide range of measures, including
authorizations, verifications and reconciliations, assessments of operating performance and verifications that due care is
exercised to protect assets and that the separation between functions is effective.
Internal control procedures implemented by the Group are designed to manage the subsidiaries' accounting and financial
information and to ensure that such accounting and financial information is exhaustive, accurate and fair.
As required by Article 302 of the Sarbanes-Oxley Act, the Chief Executive Officer and the Chief Financial Officer of Atari
Inc., the Group's subsidiary in the United States, pointed out significant internal control shortcomings in the 10-K report
filed for the fiscal year 2006/2007, in the following areas:
 The procedure for calculating tax expenses and preparing notes to the annual financial statements concerning
taxes;
 Procedures for the preparation and review of financial statements;
 Information on related parties.
At the time, these shortcomings led US management to determine that internal control procedures were not efficient, as
measured against the COSO guidelines. Measures to correct these significant weaknesses were implemented in fiscal
year 2007-2008.
In its 10-K report filed July 1, 2008, the management of Atari Inc. concluded that the Group had remedied the three
internal control shortcomings identified at the end of fiscal year 2006-2007.
Reporting procedure
The Group's financial management is in charge of ensuring that the reporting procedure is consistent with Group
guidelines (A-Book) which are available on the intranet system. The procedure calls, inter alia, for the submission of
monthly reports by subsidiaries with an analysis of key operating data and of the use and source of funds, based on a
model and standards selected by the Group. In connection with the Group‟s restructuring, monthly reports will soon be
supplemented by quarterly presentations by regional managers on business, changes in the cash position and financial
results.
During the year, the financial staff and management focused on the introduction of the new financial reporting and
consolidation system consistent with IFRS. The system is now operational and the staff will go back to the drafting of
Group accounting guidelines prescribed by IFRS.
Preparation of the consolidated financial statements
The consolidated financial statements are prepared by the financial management on the basis of information provided to
it by the general and financial management of subsidiaries. The manner in which this information is presented must be
consistent with the Group's instructions. The information is prepared by the subsidiaries.
In order to ensure the accuracy of financial reporting by consolidated subsidiaries, Group financial management
circulates internal memoranda issued by the regional financial management. The memoranda include a cost-based
review of the principal financial items, which are compared to budgeted expenses, and a specific review of the business
risks to which they are exposed. The format, content and frequency of those memoranda will shortly be modified to
reflect the Group‟s new structure. They will also be used as a source for quarterly presentations by the regions.