Internal Audit

Internal Audit is the appraisal process in order to provide objective assurance as well as consultation activities to improve the operating ability and value added of the Company. The appraisal process is undertaken through a systematic evaluation to improve the effectiveness of risk management, control and corporate governance process.
Internal Audit Charter
Pursuant to Decision of the Chairman of Bapepam-LK No.KEP-496/BL/2008 dated 28 November 2008 regarding the Establishment and Guidelines for Internal Audit Charter, the Company has an Audit Charter endorsed by the Board of Directors. Broadly speaking, Audit Charter sets out the Vision and Mission, scope of work, Duties and Responsibilities, Authorities, Position and Organizational Structure, Follow-up of Audit Results, as well as Requirements and Code of Ethics for Internal Auditor.
Head and Structure of Internal Audit
Base on its position and organizational structure, the Internal Audit is led by Head of Internal Audit Department who reports to the President Director. Head of Internal Audit position is directly appointed and dismissed by the President Director with the approval of the Board of Commissioners; the Head of Internal Audit Unit is chaired by Denny Yanto since 2004. In conducting its duties and responsibilities, the Head of Internal Audit is supported the Auditors with specialities (in Agronomy, Accounting and Management).


Duties and Responsibilities
As set out in the audit internal charter, in order to ensure effective internal control within the company, the Internal Audit Department do the followings:
• Prepare and implement the annual Internal Audit Work Plan.
• Set the frequency of audits, inspection subjects, and audit scopes to achieve the audit objective.
• Test and evaluate the implementation on the internal control and risk management systems and in compliance with company policies.
• Perform inspection and assessment of efficiency and effectiveness in the area of operations, finance, accounting, human resources and other activities.
• Provide advice on improvements and other objective information relating to activities under review within all required levels of management.
• Prepare reports containing audit findings and submit it to the Board of Directors and the Board Commissioners.
• Monitor, analyse and make follow-up reports on the implementation of suggested improvements.
• Prepare a program to evaluate the quality of internal audit activity performed.
• Perform special audit whenever needed (whistle-blower).

In order to perform its duties and responsibilities, Internal Audit Department has the authority to access all relevant information about the Company in relation to its duties and functions, including third parties information, which has business relation with company.
Throughout its duties, Internal Audit Department communicates directly with the Board of Directors, Board of Commissioners and members of the Boards of Directors, the Board of Commissioners.
Program and Implementation
Throughout 2013, Internal Audit Department has conducted 207 assignments (each working unit is audited 1-3 times per year) in all the Company operational areas.


The audits were in the form of operational audits, special audits and assessment pertaining to internal control. Results of audit process is documented in the Audit Report which contain the audit conclusion including audit findings, potential risk associated with audit finding; the disclosures of the conditions that need improvement; recommendations that need to be taken by the management, and executor of such recommendations. The Audit Report is submitted to the President Director and related auditee.
Internal Control System
As we have described above, one of the duties and responsibilities of Internal Audit Department is to inspect and assess on the efficiency and effectiveness in the areas of operations, finance, accounting, human resources and other activities.
Effectiveness of Audit Internal and Internal Control System
The President Director assesses the effectiveness of Audit Internal and Internal Control System based on Audit Report presented by the Head of Internal Audit Department. Moreover, throughout its duties, Internal Audit Department communicates directly with the Board of Directors, Board of Commissioners and or the Audit Committee and members of the Boards of Directors, the Board of Commissioners and/or the Audit Committee. Hence, the Internal Audit Department meets regularly with the Board of Directors, Board of Commissioners and the Audit Committee and to coordinate activities with the external auditor’s activities.