Internal Control
Internal control over financial reporting
Loomis’ internal control is designed to ensure that the processes for preparing financial reports are highly reliable and that Loomis, as a listed company, complies with all relevant accounting standards and other requirements. The internal control system is designed to manage risks, rather than eliminate them, and can only provide reasonable, but not absolute, assurance that no material errors or shortcomings will arise in financial reporting.
Internal control framework
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1. Control environment
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2. Risk assessment
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3. Control activities
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4. Information and communication
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5. Monitoring activities – roles and responsibilities
1. Control environment
Loomis’ group-wide internal control of financial reporting is managed by the Group Finance department and the finance departments of the reporting segments. Group Management and the Group Finance department have joint responsibility to oversee and verify that the Group has local routines to meet the provisions in both global and local laws and regulations, and to ensure that financial reporting is correct. Loomis has a segment structure for monitoring and guiding the countries in each segment. Responsibility for the application of laws and regulations in financial reporting, compliance with the Group’s routines and procedures, and internal control rests with each subsidiary and country management team.
Group Management and the Group Finance department are responsible for following up on the work of external auditors. Observations and recommendations from the external audi-tors are discussed with the subsidiary in question and any ac-tion plans and action owners are communicated to the relevant individuals who takes the necessary actions, which are thereafter followed up. The results of internal control work are reported to the Audit Committee upon request.
2. Risk assessment
An assessment of the risks associated with financial reporting is conducted annually. If necessary, further control activities are introduced or existing ones are strengthened.
3. Control activities
Control activities are the actions established through Loomis’ policies and procedures that help to ensure that manage-ment’s directives on risk mitigation are carried out in order to achieve the objectives. Control activities have been developed and implemented to mitigate financial reporting risks. Control activities are performed at all levels, and at different stages of the business processes.
4. Information and communication
Each operating entity within the Group regularly conducts a self-assessment of insights into and compliance with the specific parts of the Group’s internal control requirements. This system enables comparisons to be made between coun-tries and for results to be compiled at the Group and country levels. Reports are made available to each country manage-ment team, segment management, Group Management and the Audit Committee.
5. Monitoring activities – roles and responsibilities
The Board, President and CEO and CFO monitor internal con-trol of financial reporting. The Board has appointed an Audit Committee tasked with, among other things, ensuring inde-pendent oversight of the effectiveness of the Group’s internal control systems and financial reporting process.