The aim of internal control connected with the financial reporting process is to ensure that the management has reliable, up-to-date information to help in decision-making and that the financial statements and interim reports are prepared in accordance with legislation. Operative and financial reporting supported by IT systems enables efficient management and control of the Company's business operations.
Reliable financial reporting must be based on appropriate control of financial administration and accounting processes. Supervision of the financial reporting process is within the responsibility of the Audit and Finance Committee. TVO's Finance Center of Expertise is in charge of the financial planning and reporting processes of the Group, its subsidiary and joint venture including its subsidiary. The main processes of financial reporting have been described and their control activities defined. Development of the processes and control activities is a continuous activity.
In the TVO Group's consolidated financial statements the International Financial Reporting Standards (IFRS) are followed, while in the parent company's separate financial statements the Finnish Accounting Standards (FAS) are followed. The purpose of the parent company's internal accounting is to produce financial information for the shareholders by segment and by share series. The accounting system by segment and share series is based on the Finnish accounting practice, and the related accounting principles have been approved by the Board of Directors. Also the Company's Financial Policy is approved by the Board of Directors.
The main principles and instructions on financial reporting have been laid down in the Company's Administration Manual and Accounting Manual, and provide the basis for financial reporting within the Group. TVO's Finance Center of Expertise is responsible for the correctness and consistency of external and internal financial reporting and for compliance with the segment and series of shares' accounting principles as approved by the Board of Directors. The Finance Center of Expertise is responsible for developing the reporting process, maintaining related instructions, and determining the control activities and measures related to financial reporting processes. Each control measure has a responsible person and they are part of monthly, quarterly, and annual reporting. Control measures include reconciliations, analytical review, and approval procedures which are used to ensure the correctness of financial reporting.
Public financial reporting comprises interim reports and annual financial statements. The public financial reporting is prepared according to the same methods as the monthly internal reporting.
The aim of TVO's strategic planning is to ensure that the Company's operations support implementation of the Company's vision, strategy and long-term planning and goals, and that budgeting is consistent with the strategic plans. The Finance Center of Expertise gives instructions on the budgeting process, and a consistent system for budgeting, forecasting and follow-up is used.
The status of the annual goals is monitored through monthly reporting to the management and Board of Directors. The Finance Center of Expertise must inform the management of any deviations in the results from the plans and analyze the reasons for such deviations as well as prepare financial results forecasts.
The performance management measures related to the management and control of the operations, measures of the main processes and realization of the Company's objectives are monitored in accordance with approved schedules.
