Marks and Spencer 2015 Annual Report Download - page 52

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MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
ACCOUNTABILITY
AUDIT COMMITTEE REPORT CONTINUED
The Board assumes ultimate responsibility
for the e ective management of risk across
the Group, determining its risk appetite and
tolerance as well as ensuring that each
business area implements appropriate internal
controls. The Group’s risk management
systems are designed to manage rather
than eliminate the risk of failure to achieve
business objectives, and can only provide
reasonable and not absolute assurance
against material misstatement orloss.
See p23-25 of the Strategic Report for more
information on our material risks.
See p44-45 for further information on our
risk management processes.
The key features of the Group’s internal
control and risk management systems
that ensure the accuracy and reliability of
fi nancial reporting include clearly defi ned
lines of accountability and delegation of
authority, policies and procedures that
cover fi nancial planning and reporting,
preparing consolidated accounts, capital
expenditure, project governance and
information security, and the Group’s
Code of Ethics and Behaviours.
The Board has delegated responsibility
for reviewing the e ectiveness of the
Group’s systems of internal control to the
Audit Committee. This covers all material
controls including fi nancial, operational and
compliance controls and risk management
systems. The Committee is supported by a
number of sources of internal assurance
from within the Group in order to complete
these reviews, in particular:
1. Internal Audit & Risk The Group’s
primary source of internal assurance
remains delivery of the Internal Audit
Plan, which is structured to align with the
Group’s strategic priorities and key risks
and is developed by Internal Audit &
Risk with input from management.
Recommendations from Internal Audit &
Risk are communicated to the relevant
business area for implementation of
appropriate corrective measures, with
results reported to the Committee.
2. Business Presentations Focusing primarily
on the key risks identifi ed in the Group Risk
Profi le, management continues to provide
updates to the Committee on how these
are managed in individual business areas.
These are complemented by independent
reviews conducted by Internal Audit & Risk.
3. Other control agencies Responsible for
maintaining control over critical areas of
risk, the processes and controls of these
agencies are tested by Internal Audit & Risk
during relevant audits. An over view of these
agencies and the manner in which they
provide assurance to the Committee is
indicated in the table below.
The Group was compliant throughout
the year with the provisions of the UK
Corporate Governance Code relating to
internal controls and the FRC’s revised
Turnbull Guidance on Internal Control.
No signifi cant failings or weaknesses were
identifi ed during the Committee’s review
in respect of the year ended 28 March 2015
and up to the date ofthis Annual Report.
Where the Committee identifi ed areas
requiring improvement, processes are in
place to ensure that the necessary action
istaken and that progress is monitored.
Further details of these processes
can be found within our detailed
Corporate Governance Statement
which is available to view in the
Corporate Governance section of
marksandspencer.com/thecompany.
Andy Halford
Audit Committee Chairman
ASSURANCE AND INTERNAL CONTROL ENVIRONMENT
COMMITTEES Existing direct
lin e o fr epo r tin g
AUDIT
COMMITTEE
Fire, Health
& Safety
Plan A* Business
Continuity
ANNUAL UPDATE BY RELEVANT EXECUTIVE
REPORTS Formal updates
Information
Security
Whistle Blowing
& Fraud
GSCOP
(Grocery Supplier
Code of Practice)
Bribery Code
of Ethics
ANNUAL PAPER
OTHER CONTROL AGENCIES Updates as
requested/
appropriate
Food Safety & Integrity Ethical Audits
Trading Safely & Legally
AUDIT TESTING BY INTERNAL AUDIT & RISK (ASAPPROPRIATE)
* Reports directly to the Group Board.
INTERNAL ASSURANCE FRAMEWORK