The internal control and risk management system as it relates to the accounting process

as it relates to the accounting process

As part of its risk management system, Borussia Dortmund has an accounting process-related internal control system that defined appropriate structures and processes and implemented them within the organisation. The aim is to ensure proper and effective accounting and financial reporting in accordance with the applicable accounting principles. The key features of the accounting process-related internal control and risk management system employed by Borussia Dortmund can be described as follows:

• Borussia Dortmund distinguishes itself through its clear organisational and corporate structures as well as its control and monitoring structures.
• The internal control and risk management systems as they relate to the accounting process form an integral part of operational and strategic planning processes.
• Responsibilities have been clearly assigned in all areas of the accounting process (such as financial accounting and management cost accounting).
• Reporting is carried out in monthly, quarterly, semi-annual and annual intervals, whereby a distinction is made between matters requiring immediate action by the Company and those involving Company strategy.
• The computer systems used in accounting are protected against unauthorised access. An access and roles concept is implemented that controls and documents the access rules.
• An adequate system of internal guidelines has been established and is adapted, expanded and updated on a continuous basis. The document management system in place ensures that the guidelines are reviewed and revised on a regular basis.
• The departments involved in the accounting process fulfil quantitative and qualitative requirements.
• The completeness and accuracy of the accounting data is checked regularly by reviewing samples and conducting plausibility tests, both manually and by means of software employed for this purpose. The software uses an integrated workflow to process any accounting anomalies. Daily monitoring for anomalies and defined controls ensure that any potential errors in the accounting process can be immediately rectified.
• The principle of dual control is adhered to at all points in the Company’s accounting-related processes.
• The Compliance, Risk Management and Internal Audit department reviews the various internal business processes in accordance with the internal audit plan.
• The management receives reports at scheduled intervals throughout the process or more frequently if necessary.
• The Audit Committee of the Supervisory Board concerns itself with the key issues relating to accounting, risk management, internal audit and the audit assignment on a regular basis.

The accounting process-related internal control and risk management system, the key features of which are described above, ensures that transactions can be correctly recorded, prepared and accounted for in the financial statements.

The German Corporate Governance Code (“GCGC”) calls for disclosures on the internal control and risk management system that go beyond the statutory requirements for the combined management report and are therefore excluded from the substantive audit of the combined management report by the statutory auditor (“information extraneous to management report”). These are discussed in the corporate governance declaration referred to below.