2018 Integrated Report – On track towards a better Railway

Opportunity and risk report

Key characteristics of ICS and RMS with regard to the Group accounting process

Our RMS is complemented by a Group-wide internal control system (ICS) that also includes the accounting-related processes. To the extent that is deemed to be appropriate, the components of our ICS take into account the principles published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) called the “Internal Control – Integrated Framework” in its revised version from 2013. On that basis, our accounting-related ICS is a continuous process based on basic control mechanisms, such as system-based and manual reconciliations, the separation and clear definition of functions as well as the monitoring of compliance and further development of Group-wide guidelines and special work instructions.

The accounting-related control mechanisms we use beyond the instruments outlined above include standardized reporting throughout DB Group and the regular updating of the relevant accounting directives and accounting-related systems.

Subject to a binding schedule, business transactions of the accounting-relevant units are processed in line with IFRS principles and in compliance with Group-wide, uniform procedures. These are then transmitted to the centralized consolidation system.

The auditing activities of the intra-Group auditors, which represent a key element of our control mechanisms, are focused on evaluating the adequacy and effectiveness of our ICS. Audits are also conducted during the stocktaking of property, plant and equipment as well as inventories. In addition to these measures, the Audit and Compliance Com­­­­mittee and the Supervisory Board monitor the ac­­count­­ing process and the effectiveness of the ICS.

The management of the companies included in the scope of fully consolidated companies and of the individual business units of DB Group verifies the completeness and ac­­­­curacy of the reporting data relevant to the financial statements among other aspects, using a quarterly internal re­­porting process. It is also confirmed that the Management responsible have implemented the centrally defined ICS minimum standards for reporting and, where appropriate, have supplemented these with their own documented management and monitoring tools.