Internal Audit Service
The Internal Audit Service (IAS), which is directly subordinate and accountable to the Board of Directors performs the organization and implementation of internal audit in Transtelecom JSC. The Audit Committee under the Board of Directors of the Company supervises the IAS's work. The manager and employees of the Service are appointed by the Board of Directors of the Company.
The mission of the Service is to provide the required assistance to the Board of Directors and Management in the performance of their duties for Company's strategic goals achievement.
The key objective of the Service is to provide the Board of Directors and the Audit Committee with independent and objective information through the assurance of guarantees and consultations aimed at internal control, risk management and corporate governance systems improvement in the Company.
The IAS Regulations set out the goals, powers and responsibilities of the Service, as well as qualification requirements. The IAS Regulations are based on the International Professional Standards. The IAS Regulations fully corresponds to the specific business needs of Transtelecom JSC.
Organizational subordination and functional accountability of IAS to the Board of Directors is achieved by the following conditions:
- approval of the Regulations and other policies in the field of internal audit that regulate the goals, tasks, functions and procedures of the IAS by the Board of Directors (preliminary review by the Audit Committee);
- approval (preliminary review by the Audit Committee) of a risk-oriented annual audit plan by the Board of Directors;
- provision of quarterly and annual reports on the implementation of the annual audit plan and other information on the activities of internal audit to the Board of Directors (Audit Committee);
- approval of resolutions on appointment, dismissal, remuneration of the head and employees of the internal audit department by the Board of Directors (preliminary consideration by the Audit Committee);
- BoD's (Audit Committee) consideration of significant restrictions on the authority of the IAS or other restrictions that could adversely affect the implementation of internal audit.
The bylaws regulating the operations of the IAS (the Regulations, the Manual on the organization of internal audit, etc.) have been drawn up by the head of the IAS. These documents were reviewed, preliminarily approved by the Audit Committee and adopted by the Board of Directors of the Company.
IAS performs its activities on the basis of a risk-oriented annual audit plan, approved annually by the Board of Directors of the Company and revised, if required.
The IAS periodically evaluates the effectiveness of the internal control system and the risk management system using generally accepted performance standards and best practices.
In 2017, the actual staff number of the IAS was 3 people.
In 2017, according to the Annual Audit Plan approved by the resolution of the Board of Directors of the Company dated March 17, 2017 (Minutes No. 2/2017), 9 scheduled audits were conducted. The main areas of audit were related to the assessment of the risk management, internal control and corporate governance procedures effectiveness in various areas of the Company's operation, including telecommunications processes, information technology, investment activities and commercial processes.
In total, according to the results of audits of the IAS, 78 recommendations were issued, which have been agreed and accepted for execution by the audit entities. IAS performs continuous monitoring over the implementation of recommendations issued during the audit. Reports of the IAS with the results of audits and monitoring results are submitted quarterly to the Board of Directors of the Company for consideration.