03 Risk management Internal control process relating to the preparation of accounting and financial information Thanks to a very robust process for tracking product performance in every market, Michelin has always been able to quickly and proactively issue recalls in response to any risks that could potentially impact the safety of its customers. This is also one of the promises made in the Group's Quality Policy. Governance and impact management response Product performance impact is governed by the Product Performance Monitoring Board, chaired by the Corporate Internal Audit, Risk Management, Internal Control and Quality Director. All Group employees, at every point in the value chain, are involved in managing these impacts: n product design and development projects are managed in accordance with detailed project management procedures. Products and services are described in specifications that cover customer requirements and expressed needs, the potential impact of the particular or extreme conditions of use in a given region and all of the applicable standards and regulations. The Research, Development, Process Engineering and Quality functions are responsible for performing robust simulations and tests on new products to ensure that they comply fully with the design specifications; n the entire production process is subject to quality assurance procedures designed to guarantee that the products comply with Michelin’s safety and performance standards; n advice and support in the proper use of products and services is provided throughout their life cycles with technical brochures and training, including an ongoing, Michelin-led program of customer training courses; n a network of in-field technical advisors is helping to support customers and identify changing usage practices; n a product/service performance monitoring process based on customer experience and satisfaction ensures that even the slightest signs of a problem are detected. This process now uses artificial intelligence, forecasting and alert systems to minimize the time needed to detect a potential problem. The current processes have been certified by independent organizations. The Group has taken out specific insurance cover against the risk of product recalls and liability claims. The Group's insurance program is described in section 3.1.7. 3.3 INTERNAL CONTROL PROCESS RELATING TO THE PREPARATION OF ACCOUNTING AND FINANCIAL INFORMATION Among the various objectives of the risk management and internal control system, this section focuses on the control activities related to the process of preparing accounting and financial information. The control activities related to the process of reporting non-financial data are described in Chapter 4 below. PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION The Managers are responsible for disclosing reliable financial and accounting information. The Accounting, Consolidation, Management Control and Financial Communication Departments all contribute to the process of producing this information. The Group's accounting teams generally report to the heads of the Regions and Shared Service Centers, while its budget controllers analyze the Group's performance based on its reporting segments. Consolidated financial reports are prepared monthly according to the same overall process as for the annual financial statements. The internal control procedures required to produce reliable accounting information are defined at Group level and implemented locally. These include a physical inventory of both fixed assets and inventories, segregation of tasks and reconciliation with independent sources of information. A dedicated team is in charge of aligning accounting policies throughout the Group, monitoring changes in applicable financial reporting standards, updating accounting manuals for all the subsidiaries and dealing with any issues they may raise. Statutory and management accounting data are reported simultaneously by the subsidiaries, and programmed controls verify that the main indicators – such as revenue and operating income – are consistent between the two sets of data. Statutory accounting data received from the subsidiaries are checked for consistency and then consolidated to produce the Group's financial statements. 167 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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