Page 16 - OeEB-AnnualReport_2013

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OeEB Annual Report 2013
16
Management report
OeEB outsources all accounting activities to its parent
institution, Oesterreichische Kontrollbank Aktiengesell-
schaft (OeKB). The specific requirements are defined
in a service agreement. In terms of the accounting
process, the internal control system thus meets the
same standard as that of OeKB.
Within the Executive Board of OeEB, Michael Wancata
has responsibility for the accounting function and for
the establishment and design of a system of internal
control and of risk management that meets the bank’s
needs, particularly in relation to the accounting
process. The implementation of the internal control
system is effected jointly with OeKB or by OeKB,
according to the specific requirements of OeEB.
The key features of the internal control system can be
described based on the definition of the Committee of
Sponsoring Organizations of the Treadway Commission
(COSO). The COSO framework consists of five
interrelated components: the control environment, risk
assessment, control activities, information and
communication, and monitoring.
The purpose of the internal control system is to
support management so as to enable it to ensure
effective and continually improving internal controls in
respect of accounting. The system is intended to
ensure compliance with policies and regulations and to
create conditions conducive to the effectiveness of
specific control activities in the key accounting
processes.
The Group-level Internal Audit function (performed by
the OeKB Group’s Internal Audit department) indepen-
dently and regularly verifies the adherence to internal
rules, including also the accounting rules. The head of
Group Internal Audit reports the findings directly to the
Executive Board of OeEB. The Internal Audit activities
are outsourced to OeKB under a service agreement.
n
Control environment
The most fundamental aspect of the control environ-
ment is the corporate culture in which management
and employees operate. OeEB continually works to
improve communication and the transmission of its
basic corporate values.
The manner of implementation of the internal control
system in respect of the accounting process is set out
in the written internal policies and procedures of the
accounting function. The responsibilities in relation to
the internal control system have been adjusted to fit
the company’s organisational structure, in order to
ensure a satisfactory control environment that meets
the requirements.
n
Risk assessment
Risks relating to the accounting process are identified
and monitored by OeKB Group management and OeEB
management, with a focus on material risks.
The preparation of the financial statements regularly
requires the use of estimates. This involves the
inherent risk that future developments will differ from
these estimates. As all loans extended by OeEB are
guaranteed by the Republic of Austria, this estimation
risk is particularly relevant to, for example, assump-
tions regarding the stability of the value of interests
in companies.
Key features of the internal control system in relation to the accounting process