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REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS
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4. System of internal controls
relevant business units to ensure the implementation and effectiveness of action
plans that aim to reduce these risks. In 2016, the industrial risks related to climate
change were identified in the framework of the group’s risk assessment process.
That assessment is discussed in paragraph 4.8.3 of Section 4.
Risk factors
of this
Reference Document.
In 2016, the group’s major capital spending and commercial projects were regularly
presented to the Audit and Ethics Committee by the managers in charge of them
and by the Finance Department, providing an opportunity to discuss changes in
the risks associated with those projects with the control bodies.
4.4.2.
SETTING OBJECTIVES
In 2016, the process of setting objectives for the group was framed by the 2015-
2017 Transformation Plan currently in progress.
4.5.
CONTROL ACTIVITIES
The functional departments, acting on behalf of the group’s management bodies,
deploy their policies and ensure their correct implementation. In particular, the
Management and Accounting Control Department defines and ensures the
application of management control rules, documents the accounting and financial
management processes, and ensures compliance with rules on delegations of
authority pertaining to financial commitments.
Each operational and functional level implements appropriate control activities to
regularly evaluate the level of achievement of established objectives. In particular, the
budget updates and reporting documents are used to regularly and progressively
compare actual results and the extent to which objectives have beenmet with those
defined when the budgets were approved.
By definition, each organization is responsible for its own internal controls. These
controls rely on the mobilization of human, material and financial resources, the
organization of those resources, the deployment of specific objectives within the
organization, and the implementation of controls for prevention or detection.
Preventive controls are carried out according to specific procedures, whether
manual or computerized, involving approvals at appropriate levels of the
organization, among other things. Detection controls consist of after-the-fact
verifications connectedwith specific supervision of the work performed and analysis
of variances or anomalies. Information systems, performance indicators, etc. are
used to facilitate this supervision.
In addition, audit and expert bodies are charged with controlling themost significant
issues in relation to the specific goals of the group and of the subgroups.
In particular, as regards accounting and financial information:
p
each entity has set up a system of controls before transactions are recorded;
p
controls are carried out at the different stages of the consolidation process:
○
either automatically by the consolidation software (control of debit/credit
balances, data traceability, data integrity, access control), or
○
manually by the consolidation department, financial controllers and business
analysts;
p
the group’s Tax Department performs tax reviews of the group’smain companies.
4.6.
CONTINUOUS OVERSIGHT OF THE INTERNAL CONTROL SYSTEM
In 2016, AREVA continued to take action to optimize its internal control systems.
These actions were conducted under the supervision of the Chief Executive Officer
and of the ExComs, and with the oversight of the Board of Directors through the
Audit and Ethics Committee.
The group’s Business Ethics Advisor deployed the annual compliance letter
process, which applied to all executives of the subsidiaries, the business units’
senior executive vice presidents, the regional directors, and the directors of the
group’s corporate functions.
AREVA’s Risk and Internal Audit Department intervenes everywhere in the group and
in any area relevant for internal controls. This department is under the responsibility
of its director and, under the supervisory and functional authority of the Audit and
Ethics Committee, carried out its activities completely independently, in compliance
with the Audit Charter and the international standards of the profession.
In 2016, the missions were conducted in accordance with the annual audit plan
approved by the Chief Executive Officer and examined by the Audit and Ethics
Committee. This department is responsible among other things for reporting to
the management bodies on its assessment of compliance and the effectiveness
of the internal control systems deployed throughout the group. In particular, this
assessment takes into account the risks identified using the full range of the group’s
tools (business risk model, internal control self-audit tools, interviews conducted
by the Audit Department with the General Inspectorate, the group’s principal top
managers and the statutory auditors, etc.). The recommendations resulting from
these missions give rise to performance improvement plans, which are monitored
in concert with the managers involved.
Lastly, as is the case each year, the Risk and Internal Audit Director presented his
internal controls review report to the Chief Executive Officer and to the Audit and
Ethics Committee.
In addition to audits carried out under the audit plan, the group’s entities perform
a self-audit of their internal controls every year following a standard questionnaire
(the “Self-Audit Income”), duly approved by their operational management, which
has complied since 2007 with the “Implementing guidelines for internal controls
of accounting and financial information” of the frame of reference published by the
AMF. The questionnaire, reviewed by the joint statutory auditors, was deployed in
2016 across the entire consolidation scope of the group, representing 92 entities
in some 20 countries. By entity, it covered 200 control items organized into
14 business cycles, and urged management to commit to action plans to address
the weaknesses identified.
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2016 AREVA
REFERENCE DOCUMENT