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Internal Audit Charter

  1. VISION & MISSION OF THE DEPARTMENT OF INTERNAL AUDIT (DIA)
    1. VISION OF INTERNAL AUDIT DEPARTMENT:
      The Internal Audit Department serves as a trustworthy and independent strategic partner with a vision of being professional internal auditor providing objective assurance on operations designed to offer added value and to support the creation of Good Corporate Governance (GCG).
    2. MISSIONS OF INTERNAL AUDIT DEPARTMENT:
      1. To professionally execute the internal audit function by working systematically, adopting discipline approach, to evaluate and improve the internal control system and good corporate governance;
      2. To improve competency so as to become professional internal auditor.
  2. BACKGROUND
    The Company is obliged to have an Internal Audit Charter developed in pursuance of the following regulations:
    1. Act No. 8 of 1995 concerning Capital Market
    2. Act. No. 21 of 2011 concerning Financial Services Authority (OJK)
    3. Regulations of the Financial Services Authority, Otoritas Jasa Keuangan (OJK) No. 56/POJK.04/2015 on “Establishment of and Guidelines on Drafting Internal Audit Charter .”
  3. ORGANIZATIONAL STRUCTURE

    The Internal Audit Department is directed by the Head of Internal Audit. The Head of Internal Audit is appointed by and reports to the President Director. Internal Audit staff reports to the Head of Internal Audit. The Head and staff of Internal Audit is prohibited from performing any operational function in the Company’s group.

  4. CRITERIA AND CODE OF CONDUCT
    1. The personnels of the Internal Audit Department must fulfill the requirements as follows:
      1. have knowledge and experience in auditing techniques, accounting management of other disciples of study relevant to their responsibilities;
      2. comply with the Internal Audit Codes of Conduct as stipulated in this Internal Audit Charter;
      3. have good integrity and adequate knowledge and experience in auditing;
      4. does not have any conflict of interest/personal ties potentially causing conflict of interest against the Company, including but not limited to: having third-degree kinship, vertically or horizontally, with any members of the Board of Commissioners and members of the Board of Directors;
      5. possesses effective communication skills;
      6. not an employee, a customer or a supplier of the Company;
      7. does not belong to any institutions that provides services to the Company within the last 6 (six) months;
      8. does not have any affiliate relationship with the Company, members of the Board of Commissioners, members of the Board of Directors, or the main shareholders of the Company;
      9. does not have any business relationship, directly or indirectly, relating to the Company’s business activities.
    2. Internal Audit Code of Conduct:
      The internal Audit Department must comply with the Code of Conduct of the Audit Committee as set forth by the Company as follows:
      1. Integrity
        1. Performing all tasks in an honest, prudent and responsible manner;
        2. Adhering to prevailing provisions of the Law and conduct any disclosure as obliged by Law or profession;
        3. Not engaging in any illegal activities or conducting any actions that may discredit the profession of internal audit or the organization with consent;
        4. Respecting and supporting valid and ethical objectives of the organization.
      2. Objectivity
        1. Not participating in any activities or relationship that may, or allegedly may, hinder fair internal audit assessment, including any activities or relationships that may cause conflict of interest against the organization;
        2. Not receiving anything that may, or allegedly may, interfere with professional judgment;
        3. Having to disclose all known facts, which otherwise will distort the report on the reviewed activities.
      3. Confidentiality
        1. Using and protecting the information obtained during the performance of tasks in a prudent manner;
        2. Not disclosing any information for the purpose of personal benefit, or in any manner infringing the law and regulations or causing loss to the organizations’s valid and ethical objectives.
      4. Competence
        1. Only providing services requiring his/her knowledge, expertise and experience;
        2. Having to provide auditing service aligning with the International Professional Practices Framework (IPPF)’s standards for Internal Audit;
        3. Continuously upgrading his/her skills, effectivity, and service quality.
  5. DUTIES, RESPONSIBILITIES, AUTHORITIES AND SCOPE
    1. Duties and Responsibilities:
      The Internal Audit Department Committee has duties and responsibilities as follows:
      1. Preparing and executing annual planning and budgeting for internal audit activities based on risk priority pursuant to the objectives of the Company;
      2. Reviewing and evaluating the execution of internal control and risk management system in compliance with the Company’s policies;
      3. Conducting inspection and assessment on the efficiency and effectivity of all fields of the Company’s operation;
      4. Providing recommendation for improvement and objective information on reviewed activities at all levels of management;
      5. Preparing reports on audit results and submitting the reports to top management, Presiden Director, Board of Commissioners or Audit Committee;
      6. Monitoring, analyzing and reporting the execution of follow-up on recommended improvements;
      7. Conducting special investigation/audit if necessary.
    2. Authorities:
      In performing its duties, the Internal Audit is entitled to authorities as follows:
      1. Accessing the Company’s documents, data and information on employees, funds, assets and other necessary resources;
      2. Communicating directly with the employees, including conducting periodical meetings with the Board of Directors, Board of Commissioners and Audit Committee.
    3. Scope
      1. Ensuring that the internal control system is adequate, working efficiently and economically, and functioning effectively in achieving desired objectives and target;
      2. Evaluating compliance with the prevailing provisions of laws and regulations and the Company’s policies and procedures;
      3. Evaluating the reliability and integrity of financial and operational information;
      4. Performing special tasks relevant to the above-mentioned scope of work, such as investigation and disclosure of distortion, fraud, and squander.
    4. WORK PROTOCOL AND PROCEDURE
      The Internal Audit Department’s work protocol and procedure covers:
      1. Making Annual Work Plan/Program with due observance to risks or control problems identified by Management and notified to the President Director and Audit Committee to be reviewed and approved;
      2. Executing approved audit work plan , including special task or projects required by Management, Board of Commissioners or Audit Committee (if any);
      3. Assessing and making accurate recommendations to enhance good corporate governance in achieving the objectives;
      4. Evaluating effectivity and contributing to improving risk management process ;
      5. Assisting the Company in maintaining effective control by evaluating effectivity and efficiency with continuous improvement actions;
      6. Assisting in the investigation of suspected significant fraudulent activities in the Company and reporting the findings to Management and the Board of Directors and Audit Committee;
      7. Maintaining professionalism of the audit staff by upgrading the knowledge, skills, and experience to fulfill the requirements of this Charter;
      8. Releasing periodical audit reports to the President Director and Audit Committee on the summary of audit activities and improvement follow-up status;
      9. Conducting annual review on the Internal Audit Charter and updating the relevance to be presented to the President Director and Audit Committee for approval.
    5. BENEFITS OF INTERNAL AUDIT CHARTER
      The guidance in this Inernal Audit Charter can be implemented to attain various benefits, i.e.:
      1. Serving as formal acknowledgment of internal audit functions; this Internal Audit Charter can serve as a ‘contract’ between Internal Audit Department and the Board of Directors, Board of Commissioners, and Audit Committee to authorize Internal Audit to commence auditing work in the Company. This Internal Audit Charter also endow the Head and Staff of Internal Audit with rights to investigate every department in the organization and take a look at the Company’s various assets and documents;
      2. Documenting the scope, obligations, authorities and professionalism of the internal audit function;
      3. Serving as comparison to professional standards to assess the adequacy of internal audit work; serving as a benchmark of the adequacy of the execution of internal Audit work. By working up to the laid standards, the auditor can defend themselves from allegations of malpractices or under-performance.
      4. Serving as marketing documentation to improve cooperation with the Company’s other units of organization. This Internal Audit Charter improve the auditee’s comprehension towards internal audit function and can encourage participation from auditee.
    6. RESPONSIBILITY OF INTERNAL AUDIT CHARTER DEVELOPMENT
      The making and development of Internal Audit Charter is the responsibility of the Head of Audit. In the process of making and development of this Internal Audit Charter, the Head of Audit can consult top management or Audit Committee to request input, support and approval on the Internal Audit Charter.
    CONCLUSION

    This Internal Audit Charter takes effect as off approved by the President Director and Audit Committee. This Internal Audit Charter may be evaluated periodically too seek alignment with ammendments of prevailing laws and regulations. Any ammendments to be made on this Internal Audit Charter must be approved by the President Director and Audit Committee.