2013 Registration document and annual financial report - page 129

Registration Document 2013
Corporate Governance
Report of the Chairman of the Board of Directors
The Internal Audit Charter has been signed by the Group’s Chairman
and Chief Executive Officer, the Deputy Chief Executive Officer,
the Chief Financial Officer, the Senior Vice-President, Internal
Audit, and the members of the Internal Control Committee, whose
structure and roles are described in section below.
Procedure manuals and accounting principles
The Finance Manual issued to all Group Finance Departments
describes the closing process for the monthly management
accounts and sets out the Group’s charts of accounts, consolidation
principles, accounting standards and policies. It also addresses
specific issues related to the investment approval procedure and
includes the Treasury Charter, which describes cash management
procedures, the principles to be followed concerning the holding
of payment instruments and the approval of expenditures, as well
as the role and organization of cash pooling systems. Employees
can download the manual from the Group’s intranet.
In addition, a presentation of International Accounting Standards/
International Financial Reporting Standards, providing details on
how to apply the standards to the Group’s specific circumstances,
has been prepared by Group Finance and provided to the Group
employees concerned.
Lastly, consolidation instructions detailing the financial reporting
schedule and specific points concerning consolidation adjustments
to individual financial statements are issued once every six months
to the various Finance Directors and consolidation teams, and are
archived on the Finance Intranet.
Internal procedure manuals
Internal procedure manuals have been produced for the main
businesses. The purpose of these manuals is to structure and firmly
establish Group procedural guidelines, based on an assessment
of the specific internal control risks of each business.
Internal control procedures are implemented under the direct
responsibility of the Heads of the operating divisions and corporate
functions and form part of an ongoing process of identifying,
assessing and managing risks.
Internal control self-assessments
In recent years, the Group has placed considerable emphasis on
preparing, issuing and monitoring internal control self-assessment
procedures, which have now been rolled out to the majority of hotel
operating units and head offices. These procedures interconnect
with the Group’s existing internal control standards and processes
and are based on analyzing the internal control risks inherent in
each business and identifying key control issues.
Data obtained from the internal control self-assessment process
are periodically centralized at Division level, with the assistance
of the internal auditors when required.
Internal Audit programs for units where the self-assessment
system has been deployed include a quantitative measurement,
a rating system, of the gap between the self-assessment and
the internal auditors’ assessment of the level of internal control.
By analyzing these gaps, it is possible to evaluate the quality of the
self-assessment procedures implemented by the unit manager.
Internal Audit reports
A draft report is prepared after each Internal Audit, setting out
observations, identified risks and recommendations. This report
is sent to the management of the audited unit, which prepares
an action plan when required. A summarized version of this draft
report is also sent on request to the members of the Executive
The final report, which includes any corrective action plans prepared
by the audited unit, is then sent to the managers in charge of
overseeing operational and financial matters for the unit concerned.
The reports prepared by the local Internal Audit Departments
are centralized by the Corporate Internal Audit Department and
a summary of the work performed by these departments is
presented to the Group Internal Control Committee.
The Audit and Risks Committee receives a quarterly summary of
the Internal Audits carried out during the period, including a status
report on the annual audit plan, an assessment of the quality of
internal control in the audited units and the gap between the internal
auditors’ assessments and any self-assessments performed by
the units, as well as the internal auditors’ main observations, and
action plans decided on by the parties concerned.
Reporting procedure
Group Financial Control is responsible for overseeing the reporting
procedure specified in the Finance Manual. The procedure requires
the Divisions to submit monthly reporting packages comprising
an analysis of key business indicators and the main components
of income, in the format prescribed by the Group. All reporting
data submitted by the Divisions must be analyzable both by nature
and by function.
The reporting procedure is designed to provide a detailed analysis
of changes in financial and operating results, to support resource
allocation decisions and measure the efficiency of the various
organizational structures in place.
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