Financial reporting and risk management
The risk management and internal control model for corporate reporting adopted by Italgas was defined in line with the provisions of Italian law and is based, in terms of method, on the “CoSO Framework” (“Internal Control – Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission), international reference model for the establishment, updating, analysis and assessment of the internal control system.
The design, establishment and maintenance of the Corporate Reporting Internal Control System are guaranteed through scoping, identifying and assessing risks and controls (at corporate and process level, through risk assessment and monitoring activities), and the relevant information flows(reporting).
Scoping and risk assessment for significant processes are carried out based on a top-down, risk-based approach. The scoping activities are intended to identify both Italgas Group companies within the scope of the Corporate Reporting Internal Control System, defining the components to be applied for each one, and financial statement information and items that are significant for that purpose, as well as the associated processes.
The risk assessment activities for significant processes are aimed at identifying the specific activities likely to generate risks of unintentional error or fraud, which may have a significant impact on the financial statements.
For companies, processes and related risks considered significant, an internal control system has been defined based on two fundamental principles: disseminating controls to all levels of the organisational structure, in line with the operational responsibilities assigned, and sustaining the controls over time, so that they are integrated and compatible with operating requirements.
The structure of the control system envisages Company Entity Level Controls, which operate across the reference entity (group/single company) and controls at process level. The latter are divided into: “Specific controls”, aimed at preventing, identifying and correcting errors or irregularities that occur during the performance of the operating activities (Process Level Controls); “Pervasive Controls”, understood as structural elements of the system, aimed at defining a general context that promotes the correct execution and control of the operating activities. The pervasive controls include those concerning: the segregation of incompatible activities (Segregation of Duties) and IT General Controls, to monitor their correct operation.
All controls are subject to regular evaluation in order to verify the adequacy of their design and operational effectiveness over time. To this end, ongoing monitoring activities have been entrusted to the management responsible for significant processes/activities, and separate evaluations have been entrusted to the Internal Auditor, who operates in accordance with an annual plan agreed with the Officer responsible for the preparation of financial reports. The plan aims to define the scope and objectives of its actions through agreed audit procedures.
The results of the monitoring and assessment of the controls, as well as any other information or situations relevant for the Corporate Reporting Internal Control System, are subject to periodic reporting on the status of the control system, which is also guaranteed by using IT tools to ensure the traceability of information on the adequacy of the design and whether the controls function well. Based on this reporting, the Officer responsible prepares an interim and an annual report on the adequacy and actual application of the Corporate Reporting Internal Control System which is shared with the Chief Executive Officer and submitted to the Board of Directors following a report to the Control and Risk Committee and the Board of Statutory Auditors, upon approval of the draft financial statements, the consolidated financial statements, and the consolidated interim financial report. Furthermore, the Officer Responsible, also in agreement with the Chief Executive Officer, issues the statements envisaged by Italian law to guarantee financial reporting.
On 18 October 2016 the Board of Directors appointed Claudio Ottaviano as Executive responsible for preparing corporate accounting documents. Claudio Ottaviano is currently Italgas’ Head of Financial Reporting and Administration.