Internal Audit

The role of the Internal Audit is to evaluate and improve the effectiveness of the control, risk management and governance processes, and to facilitate the implementation of best
practices to ensure that various risk management, control and governance processes, as designed and implemented by the Company’s management, are adequate and functioning
as planned. In doing so, the Internal Audit reviews the effectiveness and efficiency of the business processes and the compliance with policies, standards, procedures, and applicable laws and regulations.

The Audit Committee has the ultimate responsibility for the organizing of the Internal Audit. As of January 1, 2010, Ahlstrom’s Internal Audit function has been outsourced to a global service provider, KPMG Oy Ab.

Administratively, the Internal Audit reports to the CFO but on audit matters, the Internal Audit reports to the Audit Committee. The Internal Audit conducts regular process audits, site and subsidiary audits as well as audits at other Group units in accordance with the audit plan approved by the Audit Committee. The audit plan is developed by using appropriate risk-based methodology taking into account any risks or control concerns identified by the Corporate Risk Management function, the EMT and the auditors. The Internal Audit reports regularly on its activities to the Steering Group consisting of the CEO and CFO and to the Audit Committee. The Internal Audit makes recommendations to the EMT members and local management based on its observations. The Internal Audit also monitors the implementation of the action plans made based on its recommendations.

The Internal Audit is coordinated with the work of the external auditors and the Company’s other controlling and monitoring functions (Financial Accounting, Group Controlling, Taxation, Risk Management, Legal, IT etc.).

To the extent permitted by law, the Internal Audit function has free and unrestricted access to all relevant units, functions, records, physical properties and personnel.

The Institute of Internal Auditors’ "Code of Ethics" is adhered to in the conduct of the Internal Audit. The Institute’s "International Standards for the Professional Practice of Internal Auditing" (Standards) and "Practice Advisories" shall be followed to the extent practicable and applicable.

Updated: February 2017

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