Internal control over financial reporting

Internal control is an important part of Statkraft's risk management. We are employing a series of targeted initiatives intended to strengthen internal controls within the Group. A system for internal control over financial reporting has been implemented in 2009. The system will contribute to reliable financial reporting.

Statkraft is working diligently to strengthen, systematise and structure internal control over financial reporting in the Group. The background for the improvement work is an increasingly complex group structure, as well as increased internal and external requirements for and focus on risk management and internal control.

The work on internal control over financial reporting is based on the COSO framework for internal control, published by the Committee of Sponsoring Organizations of the Treadway Commission.

Management system

The management system shall contribute to a uniform understanding of the Group's guidelines and ensure a good control environment for meeting the executive management's goals and intentions. Requirements related to internal control are incorporated into the areas HSE, Ethics, ICT, Corporate Responsibility as well as Accounting and financial reporting. Internal control has been integrated into the Group's business and support processes.
 
A well-functioning control system and a good control environment are important basis for further work on internal control over financial reporting.

See illustration Statkraft's management system

Read more on Statkraft's management system under Business management. 

Internal control over financial reporting

The system for internal control of financial reporting will contribute to reliable accounting information in monthly, quarterly and annual reports. The main elements of the system are risk assessment, control activities, self-assessment, reporting and continuous control performance and monitoring:

1. Risk assessment
   Business and support processes that are significant for the financial reporting have been identified. In 2009, this comprised processes relating to income, financial items, period-end financial reporting as well as the IT systems that support these processes. The system will be extended with further processes in the coming year, based on an assessment of inherent risk.

2. Control activities
   Sufficient control activities have been identified for the processes, as well as responsibility for exercising these controls. The control descriptions are available on the Group's intranet.

3. Self-assessment
   Annual self-assessment is performed by responsible for control performance confirming that controls have been performed continuously and the residual risk is at an acceptable level.

4. Reporting
   Annual reporting to Group management and audit committee should contain information about the elements of the internal control system and state whether the internal control system functions as intended.

5. Continuous control performance and monitoring
   The controls are performed continuously throughout the accounting year and the managers are responsible for ensuring that the controls are carried out as part of the daily operations.

See illustration Annual process for internal control over financial reporting