Lenovo 2014 Annual Report Download - page 61

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2013/14 Annual Report Lenovo Group Limited
While management is responsible for the design, implementation and maintenance of internal controls, the Board and
its Audit Committee oversee the actions of management and monitor the effectiveness of the established controls.
To assist the Audit Committee in its oversight and monitoring activities, the Company maintains an independent,
worldwide Internal Audit function which provides objective assurance to the Audit Committee that the system of internal
controls is effective and operating as intended. The mission of Internal Audit is to provide the Board of Directors and
Lenovo management with:
• Independent and objective assessment of Lenovo’s system of internal controls;
• Guidance in managing and controlling risks for Lenovo stakeholders;
• Proactive support to improve Lenovo’s control posture; and
• Independent investigations regarding allegations of fraud and violations of Lenovo’s Code of Conduct and other
company policies.
To enable it to fulfill its mission, Internal Audit has unrestricted access to all corporate operations, records, data files,
computer programs, property, and personnel. To preserve the independence of the Internal Audit function, the Head
of Internal Audit reports directly to the Audit Committee on all audit matters and to the Chief Financial Officer on
administrative matters. The Head of Internal Audit is authorized to communicate directly with the Chairman of the
Board and other Board members. To help ensure the quality of the Internal Audit function and provide assurance
that the Internal Audit function is in conformity with the standards of the Institute of Internal Auditors, Internal Audit
has implemented a comprehensive and continuous quality assurance program covering all Internal Audit activities.
In addition, the Audit Committee periodically commissions an independent, external quality assurance review of the
Internal Audit function.
In selecting the audits to perform each year, Internal Audit uses information collected throughout the year from process
owners, the risk assessment team, senior executives, external auditor and the Board. Using this information Internal
Audit develops a risk based audit plan, focusing on areas with significant risks or where substantial changes have been
made. The audit plan is reviewed by the Audit Committee, which is also given quarterly updates on the performance of
the plan and key findings. From the audit work performed, process owners are able to confirm to Senior Management
that internal controls are working as intended or that necessary corrections have been made where control weaknesses
have been found. In keeping with best practices, Internal Audit regularly monitors the status of management action
plans with respect to audit findings to ensure completion and reports to the Audit Committee. Reporting also includes
identified key controls issues as well as potential controls issues in order to provide the Audit Committee full visibility
into the status of Lenovo’s control environment. Ad hoc reviews of areas of concern identified by management or
the Audit Committee may also be performed. During the last year, Internal Audit issued multiple reports covering all
significant operational and financial units worldwide.
Furthermore, Internal Audit is responsible for investigating any allegations of potential violations of Lenovo’s Code of
Conduct, the Anti-Bribery and Anti-Corruption Policy, or any other company policies as appropriate. Internal Audit
partners with Legal, Ethics and Compliance, Human Resources, and subject matter experts where necessary to ensure
the appropriate expertise when performing these investigations. Management and the Audit Committee are informed of
any required actions resulting from these reviews, and the corrective actions are monitored until completion.
Inside Information
Regarding procedures and internal controls for the handling and dissemination of inside information, the Company
is aware of its obligations under the Securities and Futures Ordinance and the Listing Rules as well as the overriding
principle that inside information should be announced immediately if it is the subject of a decision. The Company
conducts its affairs with close regard to the applicable laws and regulations prevailing in Hong Kong and has
implemented policies and procedures which strictly prohibit unauthorized use of confidential and inside information,
and has communicated to all relevant staff regarding this matter.