Control over financial reporting
The organization of the internal control over financial reporting
Volvo has had internal control processes for a long time.
Volvo applies internal control principles introduced by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO principles consist of five interrelated components. The components are: control environment, risk assessment, control activities, information and communication and follow-up/supervision.
Volvo has had a specific department for internal control since 2005. The aim of the Internal Control function is to provide support for management groups within business areas, so that they are able to continuously provide good and improved internal controls relating to financial reporting. The Audit Committee is informed of the result of the work performed by the Internal Control function within Volvo with regard to risk, control activities and follow-up on the financial reporting.
Volvo also has an Internal Audit function with the primary task of independently verifying that companies in the Group follow the principles and rules that are stated in the Group's directives, policies and instructions for financial reporting. The head of the Internal Audit function reports directly to the CEO, the Group's CFO and the Audit Committee.
For more information, read under the heading "Internal control over financial reporting" on page 106-107 in the Corporate Governance Report.