Internal control
Danfoss has a two-tier internal control system so that the responsibility for monitoring and remedying financial risks is divided between the divisions and the business units on the one hand and the central staff functions on the other. The divisions and business units monitor the transactions from a business perspective, while the central staff functions monitor the transactions on a legal basis. The system involves a natural regulation of actions. The financial audit system is based on Corporate Finance acting as a business support function in relation to the introduction of control reviews in subsidiary companies. In the course of 25-35 annual visits to Danfoss’ subsidiaries, the internal audit systems and procedures are reviewed to confirm that the companies meet requirements. This ensures the quality of accounts reporting. The group management receives a monthly report of any situations that were discovered in the course of the audit visits to subsidiary companies as well as a summary of the group’s reporting for the month.