and special items, and the sales and pur- chase process. Carlsberg’s financial control  framework reporting covers relevant Group  companies and functions to the level where  high-risk accounts are covered at least 80%  and medium-risk accounts at least 60%.  Low-risk accounts are not covered. The Group has implemented a formalised financial reporting process for the strategy  process, budget process, quarterly estimates  and monthly reporting on actual performance.  The accounting information reported by all  Group companies is reviewed both by con- trollers with regional or functional in-depth  knowledge of the individual companies/  functions and by technical accounting special- ists. In addition, significant Group companies  have controllers with extensive commercial  and/or accounting knowledge and insight. The entities in the Group are dependent on  IT systems. Any weaknesses in the system  controls or IT environment are compensated  for by manual controls in order to mitigate  any significant risk relating to the financial  reporting. This includes the implementation  of compensating controls during the imple- mentation of the supply chain integration and  business standardisation project given that an  increased number of people will have access  to systems. Sweden was the first country to  implement the project in the spring of 2013.  The Audit Committee’s Terms of Reference  outline its roles and responsibilities concerning  supervision and monitoring of the internal con- trol and risk management systems related to  financial reporting. The monitoring is performed  on the basis of periodic reporting from the fi- nance organisation, internal and external audit. The Internal Audit department ensures  objective and independent assessment of the  adequacy, effectiveness and quality of the  Group’s internal controls. The head of Group  Internal Audit reports to the Chairman of  the Audit Committee. The Audit Committee  must approve the appointment and potential  dismissal of the head of Group Internal Audit  as well as changes to his or her terms. Group  Internal Audit works in accordance with a  charter and Terms of Reference approved by  the Audit Committee. The Group has established information and  communication systems to ensure that ac- counting and internal control compliance  are established, including a Finance Manual,  a Controller Manual and internal control  requirements. Based on the risk assessment, the Group has  established minimum requirements for the  conducting and documentation of IT and  manual control activities to mitigate identi- fied significant financial reporting risks. Carls- berg’s financial control framework covers 132  controls relating to 23 accounting processes  and areas.  Besides this, the Group has implemented a  formalised reporting process for reporting  monthly, quarterly, budget and estimate  figures from all countries and functions.  The relevant Group companies and functions  must ensure that Carlsberg’s financial control  framework is implemented in their business  and that individual controls are designed to  cover the predefined specific risk. The local  management is responsible for ensuring that  the internal control activities are performed  and documented, and is required to report  the compliance quarterly to the Group’s  finance organisation. The Audit Committee’s monitoring covers  both the internal control environment and  business risk. The monitoring of the internal  control environment is covered by Carlsberg’s  financial control framework. The business risk  is assessed and reviewed at multiple levels in  the Group, such as periodic review of control  documentation, controller visits and audits  performed by Group Internal Audit. Additionally, business risks are discussed  and monitored at business review meetings  between the Executive Committee, regional  management and local management at which  potential financial impacts are identified.  Group Internal Audit conducts an annual  review of business risks. On the basis of this  and input from the Supervisory Board, the  Audit Committee and senior executives in  the Group, an audit plan is drawn up for the  year. The plan is reviewed and approved by  the Audit Committee and the Supervisory  Board. Group Internal Audit is responsible  for planning, executing and reporting on  the audit performed. The reporting includes  observations and conclusions, together with  suggestions for improvements to the internal  controls in each area audited. When conducting an audit, Group Internal  Audit assesses whether the audited entity/ function has well-established accounting  practices, written policies and procedures in  all important business areas, and adequate  internal control procedures. This includes the  Most of these matters related to isolated  incidents of fraud carried out by individual  employees in the Group. The incidents have  not had any material impact on the financial  results of the Group or the Group company  in question. Since the establishment of the whistle- blower system in April 2010, some reports  and their subsequent investigation have led  to various disciplinary sanctions for one or  more employees, including dismissals on the  basis of violation of Group policies and, in  some cases, relevant criminal laws.  Management review CORPORATE GOVERNANCE 42 Carlsberg Group Annual Report 2013 assessment of whether controls in relation to  key IT systems are satisfactory and whether  they comply with the IT Policy. The Carlsberg Group has a whistleblower  system that enables employees to report  activities that may involve criminal conduct  or violations of the Carlsberg Group’s policies  and guidelines.  The whistleblower system consists of a web- site and a hotline set up by an independent  third party to ensure the highest level of secu- rity and confidentiality. Reports filed through  the whistleblower system are handled by a  few specific employees within Group Internal  Audit who are charged with the responsibility  of evaluating any potential violation. Group  Internal Audit regularly, and at least every  quarter, reports to the Audit Committee on  issues reported via the whistleblower system  and action taken as a result thereof. In 2013,  26 reports were made to the system.  Control activities Monitoring Information and communication GROUP INTERNAL AUDIT