Porsche 2011 Annual Report Download - page 107

Control activities at group level include ana-
lyzing and, if necessary, adjusting the separate fi-
nancial statements presented by subsidiaries, taking
into account the reports submitted by the auditors
and the meetings on the financial statements with
representatives of the individual companies, at which
both the plausibility of the separate financial state-
ments and specific critical issues at the subsidiaries
are discussed.
Testing for reasonableness, the clear de-
lineation of areas of responsibility and the application
of the dual control principle are control mechanisms
applied during the preparation of the financial state-
ments. Provisions and accruals/deferrals recognized
are tested for plausibility at Porsche Zwischenholding
GmbH by the finance department and only recog-
nized in the balance sheet following internal approval.
The department with central responsibility for certain
global risks (processes, warranty, etc.) ensures that
these are completely documented and consistently
measured. Moreover, material movement data from
feeder systems is automatically compared with the
movements presented in financial accounting, and
errors immediately rectified. Matters arising from
agreements that are relevant in terms of accounting
and subject to disclosure requirements are identified
in full and presented appropriately as part of the
accounting process. In addition, there are authoriza-
tion and access rules that apply to IT systems of
relevance for the financial reporting process.
Risk management in line with the KonTraG
The group is required by Sec. 91 (2) German
Stock Corporation Act (AktG) to maintain an early
warning system for the detection of risk. The group’s
risk situation and risk management is reviewed and
documented annually in accordance with the require-
ments of the German Act on Control and Transpar-
ency in Business (KonTraG). Risk management, which
forms an operational component of the business
processes, is designed to identify risks in a timely
manner, assess their extent and, where appropriate,
take countermeasures.
Updating the risk documentation
Function-specific surveys of risks and meas-
ures carried out at certain areas of the group defined
in advance are used to record and update the poten-
tial risk position at appropriate rolling intervals. In the
process, the qualitative likelihood of occurrence and
the relative extent of any loss are assigned to each
risk identified considering the countermeasures
taken. The continuous updating of the risk documen-
tation is coordinated centrally by Porsche AG’s risk
management department in cooperation with the
planning department. The plausibility and adequacy
of the risk reports are examined in detailed inter-
views with the areas concerned.
The leasing and hire-purchase business op-
erated in the group’s financial services division is
additionally subject to regulatory supervision for
finance leases as defined by Sec. 1 (1a) Sentence 2
No. 10 German Banking Act (KWG). As part of the
reporting duties that apply for leasing companies,
the group’s financial services division has to fulfill
certain formal, qualitative and quantitative require-
ments. Implementation of the minimum requirements
for risk management is documented in a risk man-
agement manual specifically for this division and
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