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Telkom Integrated Report 2017
50
The audit and risk committees
oversees the implementation of
the combined assurance model,
resulting in combining, coordinating
and aligning assurance activities
across the various lines of defense,
as outlined alongside, so that the
assurance has the right depth and
reach.
They oversee that the scope of
combined assurance is informed
by the risks and opportunities that
materially affect the ability of the
organisation to create value.
A crucial element of a successful
and effective ERM programme
is assessing and enhancing its
maturity. In this context, as
emphasised in the King Code, risk
is positioned as a cornerstone of
corporate governance and risk
governance. Refer to page 50 for
our ERM.
TAS coordinates its work with that
of the other assurance providers,
including the external auditors,
to provide the audit and risk
committees with the comfort
thatTelkom’s significant risks are
adequately addressed.
Internal audit
TAS, the internal audit function, provides independent assurance on the
adequacy and effectiveness of the system of internal controls and risk
management to manage the significant risks of the business down to an
acceptable level.
Telkom’s corporate governance structure ensures effective internal controls
and monitors the management of significant matters. As an independent
value-adding assurance provider, TAS provides assurance to the company’s
stakeholders on the system of internal control by performing the following
functions:
> EvaluatingTelkom’s governance processes including ethics, especially the
‘tone at the top’
> Performing an objective assessment of the effectiveness of risk management
and the internal control framework
> Systematically analysing and evaluating business processes and
associated controls
> Providing a source of information, as appropriate, regarding instances of
fraud, corruption, unethical behaviour and irregularities
The group executive: TAS reports functionally to the audit committee and
administratively to the chief financial officer, and attends the audit, risk and
executive committee meetings by invitation. The function’s activities are
governed by the internal audit charter, which is approved annually by the
audit committee.
The annual audit coverage plan is developed by applying a risk-based approach,
and is reviewed and approved by the audit committee. It is revised regularly to
ensure that it remains relevant to the key business priorities and changing risk
environment. All work is performed by teams of appropriately qualified and
experienced employees, supplemented by co-sourced service providers. TAS
subscribes fully to the codes of conduct and ethics that are promulgated from
time to time by relevant professional bodies. All work is conducted in line and
complies with the internal auditing standards set by the Institute of Internal
Auditors (IIA). A summary of audit results, performance against the approved
audit plan, and progress on the resolution of management action items, is
presented quarterly to the audit and risk committees and monthly to the exco.
This enables the committees to ensure that prompt action is taken to address
key areas of concern.
The group executive: TAS chairs theTelkomCombined Assurance Forum, which
provides a communication platform for the assurance providers inTelkom
and key input for the written assessment on the effectiveness of the internal
control and internal financial control environment provided by TAS to the audit
committee annually.
TAS is subject to a five-yearly independent quality review, either in line with
International Internal Audit Standards, or as and when the audit committee
determines it appropriate, as a measure to ensure the function remains
effective. During FY2017 TAS was subject to such an Internal audit quality
assurance review. The review was conducted by the IIA and TAS achieved a
“generally conforms” rating, which is the highest level of accreditation in terms
of the IIA’s three-tier rating scale.
The IIA validator commended TAS for the role it played as proactive assurance
provider in respect of projects of a strategic nature as well as for its
real-time continuous assurance of the critical sourcing processes. TAS was
also acknowledged for the effectiveness of its management action tracking
process, which was considered to be conducted better than most of our peers.