Electrolux 2013 Annual Report Download - page 166

• Entity-wide controls – to secure and enhance the control
environment within Electrolux. Examples of important enti-
ty-wide controls are ones over Group policies, accounting
rules, delegation of authority and financial reviews.
Every calendar year, usually between March and May, the docu-
mentation of controls is updated and quality-assured. Docu-
mentation of controls is stored in a central web-based tool.
Documentation comprises of both flowcharts of the process
and descriptions of the control activities detailing who performs
the control, what he or she does and how often the control is
performed. Each control activity documented is also evidenced,
i.e., a document or file proving that the control actually has taken
place is maintained.
Monitor
Improve
Monitor and improve
Monitor and test of control activities is
performed periodically to ensure that
risks are properly mitigated.
The effectiveness of control activities
is monitored continuously at four levels:
Group, sector, reporting unit, and process. Monitoring involves
both formal and informal procedures applied by management,
process owners and control operators, including reviews of
results in comparison with budgets and plans, analytical proce-
dures, and key-performance indicators.
Within the Electrolux Control System, management is
responsible for testing key controls. Management testers who
are independent of the control operator perform these activities.
The Group’s Internal Audit function maintains test plans and
performs independent testing of selected controls. Testing is
usually performed between June and August each calendar
year with some add itional testing performed up to and at year-
end. Results from testing of controls are monitored through the
web-based tool. Controls that have failed need to be remedi-
ated, which means establishing and implementing actions to
correct weaknesses.
The test results from the larger reporting units are presented
to the external auditors who assess the results of the testing per-
formed by management and the Internal Audit function and
determine to what extent they can rely upon the work within ECS
for Group audit and statutory audit purposes. The external audi-
tors’ evaluation of ECS as part of the audit is reported to man-
agement as well as to the Audit Board and Audit Committee.
The Audit Committee reviews reports regarding internal con-
trol and processes for financial reporting, as well as internal
audit reports submitted by the Internal Audit function. The
external auditors report to the Audit Committee at each ordinary
meeting.
In addition, the Group’s Internal Audit function proactively
proposes improvements to the control environment. The head
of the Internal Audit function has dual reporting lines: To the
President and the Audit Committee for assurance activities, and
to the CFO for other activities.
Inform and
communicate
Inform and communicate
Inform and communicate within the
Electrolux Group regarding risks and
controls contributes to ensuring that the right business deci-
sions are made.
Guidelines for financial reporting are communicated to
employees, e.g., by ensuring that all manuals, policies and
codes are published and accessible through the group-wide
intranet as well as information related to the Electrolux Control
System. This information includes the methodology, instruc-
tions and hands-on checklists, description of the roles and
responsibilities, and the overall time plan.
To inform and communicate is a central element of the ECS
and is performed continuously during the year. Management,
process owners and control operators in general are responsible
for informing and communicating the results within the ECS. This
is done through different sign-off procedures during the year.
The status of ECS activities is followed up continuously
through status calls between the ECS Office and sector internal
control coordinators. Information about the status of the ECS is
provided periodically to relevant parties such as Sector and
Group Management, the Audit Board and the Audit Committee.
Management testers perform tests of
controls in different test phases during
the year.
The Internal Audit function performs
independent testing of selected con-
trols through desktop reviews and
on-site re-performance of tests to
ensure methodology is adhered to.
Test of controls and quality assurance External reporting
Control-
description
The final result after performing the
ECS activities is a quality assured
internal and external financial
reporting.
Annual Report
2013
164 ANNUAL REPORT 2013
corporate governance report