106 / 266
106 2014 Registration Document
Corporate governance
3
Internal control
Since 2010, through Group regulations, countries have had access to a
benchmark for expected controls during the production of accounting and
financial information and the consolidation process. The Consolidation
department checks for consistency and performs a reconciliation at the
close of each quarter. The reporting system ensures consistent information
as a result of these controls.
The main options and accounting estimates are subject to review by the
Group and the country-level Finance directors, including during meetings
for account closing options, organized before account closings at Group
and country level in cooperation with external auditors.
Between account closings, country visits by the Consolidation department
provide opportunities to improve the process at country level by promoting
understanding and dissemination of the Group’s accounting principles
and addressing specific issues within the various countries. If necessary,
inspections can lead to recommendations aimed at improving the country’s
consolidation procedures.
Since 2012, the Consolidation department set up the “hard-close”
process at the end of September so as to anticipate, as far in advance
as possible, potentially sensitive subjects relating to account closing.
The process also identifies any weaknesses in internal control and the
processes associated with assessing costs and income that, due to their
nature and amount, have a significant impact on Group performance,
so that these can be rectified if necessary before the annual closing.
The specific work that the countries are required to carry out, and the
Statutory Auditors’ reviews, have led in particular to internal control of
the supplier cycle, review of the main disputes and risks, and impairment
testing of stores and goodwill.
In order to provide an opinion to the Board of Directors on the draft
Financial Statements, the Accounts and Internal Audit Committee reviews
the annual and half-yearly Financial Statements and the findings of the
Statutory Auditors’ team concerning their work.
With this in mind, the Accounts and Internal Audit Committees meet
regularly and as necessary so that the committee can monitor the process
of preparing the accounting and financial information and ensure that
the principal accounting options applied are pertinent.
◗
Oversight of the internal-control system
Oversight of the internal-control system is mainly based on:
■
a self-assessment process for the application and oversight of the
main regulations defined by the Group concerning internal accounting
and financial controls. Action plans, defined at country level where
necessary and subject to monitoring;
■
in-country actions by the Group Internal Audit department. The internal
audit plan incorporates missions to review internal accounting and
financial controls.
Oversight also incorporates the assessment of information provided by the
Statutory Auditors as part of their in-country operations. Since 2010, the
country-level Finance directors systematically provide the Consolidation
department with summaries of actions and letters of recommendation from
the Statutory Auditors. It oversees implementation of its recommendations.
The entire process is regularly presented to the Accounts and Internal
Audit Committee. When significant shortcomings are detected in a
country’s internal-control system, the committee will have the region
and country-level Finance directors present developments in their action
plans on a quarterly basis.
At each statement, the Group Internal Audit department receives letters
of affirmation, signed by the country executive director and country
finance director, certifying that the consolidation reporting packages
are fair and were prepared in accordance with the IFRS accounting
principles applied by Carrefour.