The internal monitoring system (IMS)

The accounting specific internal monitoring system (IMS) is a conglomeration of systematically structured measures designed to ensure compliance with guidelines and prevent errors; the guidelines include both specific company rules (Group manual, allocation of responsibilities, authority to sign, dual verification principle, regulations for release, etc.) as well as legal provisions. The objectives of the IMS are to preclude (preventive monitoring) and identify (detective monitoring) errors in accounting and financial reporting, thus enabling amendments or countermeasures to be introduced in good time. The operational divisions are involved to ensure a complete overview of the process of financial reporting. CA Immo defines preventive monitoring as those checks undertaken by responsible administrators as they carry out business processes prior to and/or within specific systems (e.g. accounting and consolidation software). Detective monitoring refers in particular to controls carried out by responsible heads of department or the head of finance and accounting on the basis of analyses derived from such systems. In accordance with the organisational structure of the CA Immo Group, responsibility for the implementation and supervision of the internal monitoring system lies with the appropriate local management teams, i.e. the managing directors of the various subsidiaries are required to perform self-checks in order to assess and document compliance with the monitoring measures making up the IMS, which has been standardised across the Group. Alongside the Risk Management division, CA Immo has set up an Internal Auditing unit under the control of the full Management Board with a view to consolidating the internal monitoring system. Both units now oversee compliance across the Group with legal provisions, internal guidelines and rules of conduct on the basis of annually compiled auditing plans, or in response to ad-hoc assessments performed as needs dictate. On an operational level, the units review the functioning of (business) processes as regards possible risk and cost-effectiveness and assess the potential for efficiency improvements. The Internal Auditing unit also supervises the observance of checking procedures by local management teams and determines the dependability of operational information as well as the effectiveness of the internal monitoring system. Finally, the results of these assessments are reported to the responsible executive boards as well as the full CA Immo Management Board. The Supervisory Board is informed as to the auditing plan and the assessment results at least once a year. Furthermore, the proper functioning of the risk management system is evaluated annually by the Group auditor, with the findings presented to the Management Board and the Supervisory Board or its audit committee.

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