Porsche 2011 Annual Report Download - page 116

Risk report of the Volkswagen group
Integrated internal control and risk management
system relevant for the financial reporting
process
The accounting-related internal control and
risk management system that is relevant for the
financial statements of Volkswagen AG and the Volks-
wagen group comprises measures that are intended
to ensure the complete, accurate and timely trans-
mission of the information required for the preparation
of the financial statements of Volkswagen AG, the
consolidated financial statements and the group
management report, and to minimize the risk of mate-
rial misstatement in the accounts and in the external
reporting.
Main features of the integrated internal control
and risk management system relevant for the
financial reporting process
The Volkswagen group’s accounting is organ-
ized along decentralized lines. For the most part,
accounting duties are performed by the consolidated
companies themselves or transferred to the group’s
centralized shared-service centers. The financial
statements of Volkswagen AG and the subsidiaries
prepared in accordance with IFRSs and the Volks-
wagen group accounting manual and reported on by
the auditors are transmitted to the group in en-
crypted form. A standard market product is used for
encryption.
The group accounting manual ensures the
application of uniform accounting policies based on
the requirements applicable to the parent. In particu-
lar, these include more detailed guidance on the
application of legal requirements and industry-
specific issues. Components of the reporting pack-
ages required to be prepared by the group compa-
nies are also set out in detail and requirements es-
tablished regarding the presentation and settlement
of intra-group transactions and the balance recon-
ciliation process that builds on that.
Control activities at group level include ana-
lyzing and, if necessary, adjusting the data reported
in the single-entity financial statements presented by
the subsidiaries, taking into account the reports
submitted by the auditors and the outcome of the
meetings on the financial statements with representa-
tives of the individual companies, at which both the
reasonableness of the single-entity financial state-
ments and specific critical issues at the subsidiaries
are discussed. Alongside reasonableness reviews,
the clear delineation of areas of responsibility and
the application of the dual control principle are fur-
ther control mechanisms applied during the prepara-
tion of the single-entity and consolidated financial
statements of Volkswagen AG.
In addition, the financial reporting-related in-
ternal control system is independently reviewed by
Group Internal Audit in Germany and abroad.
Integrated consolidation and planning system
The Volkswagen consolidation and corporate
management system (VoKUs) is a system that can be
used in the Volkswagen group to consolidate and
analyze both Financial Reporting’s backward-looking
data and Controlling’s forward-looking data. It offers
centralized master data management, uniform report-
ing and maximum flexibility with regard to changes to
the legal environment, thus providing a future-proof
technical platform that benefits Group Financial Re-
porting and Group Controlling in equal measure. To
verify data consistency, VoKUs has a multi-level
validation system that primarily carries out content
plausibility checks between the balance sheet, the
income statement and the notes.
GROUP MANAGEMENT REPORT116