Page 163 - XL Axiata Integrated Anual Report 2020 ENG

2020 Integrated Annual Report
161
The internal control system in XL Axiata aims
to support the achievement of the company’s performance objectives, to increase the value for stakeholders, assure effectiveness and efficiency of operation, and ensuring the reability of financial reporting, the feasibility of operational and financial controls, and compliance with applicable laws and regulations.
Conformity of the Internal Control System with International Standards
In the implementation of internal control system, XL Axiata adopted the concept of three lines of defense, which are the implementation of a control strategy that in line with the framework of the Committee of the Sponsoring Organizations of the Treadway Commission (“COSO”) - Internal Control Framework.
The implementation of Internal Control in the Company that refers to COSO are as follows:
1. Control Environment
The Board of Commissioners (“BOC”) and the Board of Directors (“BOD”) have established a set of standards, procedures, and structures that provide the basis for carrying out internal control across the Company.
2. Risk Assessment
The Company continues to assess the risks that impact the Company’s business activities. The results of the assessment are documented in the key risk register and reviewed regularly.
3. Control Activities
The Company applies the four-eyes principle in carrying out critical activities, where the duties and responsibilities of each officer and supervisor are regulated in related policies and procedures.
4. Information and Communication
The Company has a means / media of communication and information exchange available to support all parties in the Company in carrying out their roles.
Internal
Control System
5. Monitoring Activities
The BOD, Senior Management and the Internal Audit Department continuously monitor the effectiveness of overall implementation of internal control. The monitoring on Company’s key risks has been prioritized and has become part of operational activities, including periodic evaluations.
Assessment of Internal Control System Effectiveness
XL Axiata periodically conducts self-assessment, on yearly basis, to the appropriateness of internal control system. The assessment results will be the consideration towards final assessment in the Annual Statement of Internal Control, signed by the President Director.
The assessment is based on various aspects, namely:
1. Control Environment:
• Integrity and Ethical Values
• Strategic Value of the BOD
• Management’s Philosophy and Leadership
Style
• Organizational Structure
• Commitment to Competencies • Authority and Responsibility
• Human Resources
2. Risk Assessment and Risk Management:
• Risk Management Organization Structure
• Business Risk Management
• Importance of Business Objective
• Identification and Analysis of Business Risk • Change Management
3. Control Activity:
• Policies and Procedures
• Segregation of Duties and Responsibilities
• Monitoring Objectives
• Procurement
• Fixed Asset Management
• Information Technology
• Information and Communication:
• Quality and Timely Information
• Information Control
TRANSFORM FASTER TO EMERGE STRONGER – GIVING BACK TO THE NATION PT. XL AXIATA TBK