Electrolux 2014 Annual Report Download - page 152

Internal control over financial reporting
Control environment
The foundation for the ECS is the control environment, which
determines the individual and collective behavior within the
Group. It is defined by policies and procedures,
manuals, and codes, and enforced by the
organizational structure of Electrolux
with clear responsibility and authority
based on collective values.
The Electrolux Board has
overall responsibility for estab-
lishing an effective system of
internal control. Responsibility
for maintaining effective
internal controls is dele-
gated to the President. The
governance structure of the
Group is described on page
. Specifically for financial
reporting, the Board has
established an Audit Commit-
tee, which assists in overseeing
relevant manuals, policies and
important accounting principles
applied by the Group.
The limits of responsibilities and
authorities are given in instructions for
delegation of authority, manuals, policies and
procedures, and codes, including the Electrolux Code
of Ethics, the Electrolux Workplace Code of Conduct, and
the Electrolux Policy on Corruption and Bribery, as well
as in policies for information, finance and credit, and in the
accounting manual. Together with laws and external
regulations, these internal guidelines form the
control environment and all Electrolux
employees are held accountable for
compliance.
All entities within the Electrolux
Group must maintain adequate
internal controls. As a minimum
requirement, control activi-
ties should address key risks
identified within the Group.
Group Management have
the ultimate responsibility for
internal controls within their
areas of responsibility. Group
Management is described on
pages –.
The ECS Program Office, a
department within the Internal
Audit function, has developed the
methodology and is responsible for
maintaining the ECS. To ensure timely
completion of these activities, specific roles
aligned with the company structure, with clear
responsibilities regarding internal control, have been
assigned within the Group.
The Electrolux Control System (ECS) has been developed to ensure accurate and reliable financial
reporting and preparation of financial statements in accordance with applicable laws and regulations,
generally accepted accounting principles and other requirements for listed companies. The ECS adds
value through clarified roles and responsibilities, improved process efficiency, increased risk awareness
and improved decision support.
The ECS is based on the Internal Control - Integrated Framework () issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). The five components of this
framework are control environment, risk assessment, control activities, monitor and improve and
inform and communicate.
Control environment — Example
Accounting Manual
Accounting principles and reporting instruc-
tions for the Group ‘s reporting entities are
contained in the Electrolux Accounting
Manual. The Accounting Manual is mandatory
for all reporting units .
Credit Policy
Rules for customer assessment and credit risk
that clarify responsibilities and are the frame-
work for credit decisions.
Delegation of Authority Document
Details the approval rights, with monetary, vol-
ume or other appropriate limits, e.g., approval
of credit limits and credit notes.
Internal Control Policy
Details responsibility for internal controls.
Controls should address the Minimum Internal
Control Requirements (MICR) within every
applicable process, for example “Order to
Cash”.
Workplace Code of Conduct
Minimum standards in the area of environ-
ment, health and safety, labor standards and
human rights. The Workplace Code of Con-
duct is mandatory for Electrolux units as well
as suppliers.
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Risk
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 ELECTROLUX – ANNUAL REPORT 2014
  