The Company’s system of internal control and risk management in the preparation of financial statements is implemented through:
Economic events at PKN ORLEN are recorded in an integrated financial and accounting system. Security and availability of information contained in the financial and accounting system are controlled at all levels of the database, applications and presentations, as well as at the operating system level. System integration is ensured by data entry control systems (validation, authorisation, a list of values) and logs of changes. PKN ORLEN keeps its IT system up to date with the changing accounting policies and other legal requirements. PKN ORLEN’s solutions are implemented into systems of the ORLEN Group companies.
In order to ensure that uniform accounting policies are applied, the ORLEN Group companies have to follow, for the purpose of preparing consolidated financial statements, the accounting policy adopted by PKN ORLEN and approved by the ORLEN Group companies.
The accounting policy is periodically updated to ensure compliance with any new legislation. Consolidated financial statements are prepared based on the integrated IT system where the process of consolidating data sourced from reporting packages provided by each ORLEN Group company is performed. Designed for financial management and reporting purposes, the system enables the unification of financial information. Performance and budget-related data, forecasts and statistics are gathered in one place, which ensures direct control and data compatibility.
The data is reviewed for cohesion, completeness and consistency, which is achieved thanks to embedded controls checking the compatibility of data entered by the respective companies.
In order to keep mitigating risks associated with the preparation of financial statements, they are reviewed by an auditor quarterly, i.e. more often than required by applicable laws. Q1, H1 and Q3 financial statements are reviewed by the auditor, whereas full-year financial statements are subject to an audit.
As per the relevant procedure in place at PKN ORLEN (meeting all applicable requirements), the auditor of the Company’s financial statements is appointed by the Supervisory Board based on a recommendation from the Audit Committee and a report on the tender process held by the Audit Committee. Deloitte Audyt Spółka z ograniczoną odpowiedzialnością, Spółka komandytowa has been appointed as a qualified auditor of PKN ORLEN’s financial statements for 2019–2021. During audit work, the auditor makes an independent assessment of the reliability and accuracy of separate and consolidated financial statements and confirms that the internal control and risk management system is effective. The auditor presents the audit and review findings to the Management Board and the Audit Committee of the Supervisory Board.
The Audit Committee, appointed by the Supervisory Board in the exercise of its powers, is a supervisory body with some of its powers and responsibilities defined in the Act on Statutory Auditors, Audit Firms, and Public Oversight of May 11th 2017, including the following:
The Company has in place certain procedures to authorise financial statements, under which periodic reports are submitted to the Management Board and then to the Supervisory Board’s Audit Committee for its opinion. Once the Audit Committee’s opinion is received and the auditor completes its review or audit of the financial statements, they are authorised for issue by the PKN ORLEN Management Board by means of a qualified electronic signature and then released to the public by the Investor Relations Office.
Full-year financial statements are also presented to the Supervisory Board for final assessment and control of the financial reporting process. The Supervisory Board is an independent body ensuring the reliability and accuracy of information disclosed in the financial statements of PKN ORLEN and the ORLEN Group.
The Financial Control, Risk and Compliance Management Office operates within the Management Board Member for Corporate Affairs function, with a primary responsibility for the implementation of financial control, risk and compliance management processes. The performance of financial control tasks is supervised by the Chief Executive Officer, President of the Management Board. The Office is divided into: