The establishment of an Internal Audit (IA) function is a fundamental part of Globe Telecom’s CG practices and policies. An IA Charter, approved by the Audit and RPT Committee/Board, establishes the mission, scope of work, authority, independence, compliance to professional standards, reporting relationships, and key responsibilities of the IA function.
IA is a service, providing independent and objective assurance and consulting function within Globe that shares our common goal of creating and enhancing shareholder value and improving the company’s operations. This is done through a systematic, disciplined, and risk-based approach in evaluating and improving the effectiveness of risk management, control, and governance processes. Globe IA provides reasonable assurance to the Board, management and the stockholders on the adequacy and effectiveness of controls encompassing Globe Telecom’s governance of operations, information systems, reliability and integrity of financial and management information, effectiveness and efficiency of operational systems and processes, safeguarding of resources and effective utilization, and compliance with laws, rules, and regulations.
To perform its auditing functions effectively, Globe IA maintains its independence from management and controlling shareholders by reporting functionally to the Board, through the Audit and RPT Committee and administratively, to the President and CEO. The Audit and RPT Committee, having appointed the CAE, also concurs in his/her replacement, reassignment, or dismissal.
Working closely with the Audit and RPT Committee, the CAE maintains an effective internal audit function by managing the entire operations, and strongly supports the attainment of corporate objectives through coverage of the most critical processes in the conduct of risk-based assurance reviews. The CAE reports the results of audit reviews and other activities in a manner that helps management take appropriate action on identified risks/issues within a reasonable period of time. Management remains primarily responsible for resolving the risks/ issues. The CAE continuously improves the internal audit operating process and standards and ensures strict compliance with International Standards for the Professional Practice of Internal Auditing (the Standards) of the Institute of Internal Auditors (IIA) and ensures alignment to global best practices. Among other responsibilities, the CAE strengthens leadership and talent bench, uplifts performance management, and manages internal costs.
Globe IA maintains, reviews, and assesses the adequacy of its Charter annually to ensure conformance with the Standards and SEC regulations. The result of the periodic assessment and any arising revisions are reviewed and approved by the Audit and RPT Committee, with concurrence by the Board. The latest charter review was performed on August 1.
Globe IA governs its internal audit activities in conformance with the IIA’s Code of Ethics, and Globe Telecom’s Code of Conduct. The CAE is responsible for overall conformance with the Standards. To assess whether the purpose, authority, and responsibility of internal audit, as defined in the IA Charter continue to be adequate and effective in enabling the internal audit function, the CAE develops, maintains, and communicates an appropriate and effective quality assurance and improvement program (QAIP) that covers all aspects of internal audit reviews and activities. The Audit and RPT Committee also receives periodic reports on the status of internal audit activities, achievement of key performance indicators, and QAIP. Globe IA periodically undergoes an independent external Quality Assurance Review (QAR) to ensure consistent conformance with the Standards. The last external QAR was done in 2018, where Globe IA obtained “Generally Conforms”, the highest rating that can be given in an external QAR process. The Standards require an external assessment at least once every five (5) years.
Globe IA adopts a risk-based audit approach in developing its annual work plan ensuring that risks, mapped to eTOM (enhanced telecommunications operations map) based processes, with integrated risk assessments for processes across the enterprise, are captured in the audit universe. Globe IA’s annual work plan is reassessed quarterly or earlier to consider emerging risks and the changing dynamics of the telecommunications business, thereby allowing maximum and timely coverage of key/critical risk areas. The Audit and RPT Committee reviews and approves the annual work plan and all deviations. The Audit and RPT Committee also ensures that audit resources are allocated adequately and focused on the areas of highest risks.
To promote excellence, Globe IA provides for continuing professional and personal development for all internal auditors to equip them in the conduct of reviews, with focus on acquiring expertise on Globe Telecom’s business processes, network and IT systems, internal controls, new accounting and auditing standards, data analytics, and regulatory updates. The audit team is composed of professionally certified accountants, internal auditors, IT and information security auditors, control self-assessors, licensed engineers, and data experts, among others. In addition, Globe IA has been actively participating in Ayala Group and Singtel Internal Audit Networks and learning from international knowledge and thought experts to benchmark and adopt leading-edge global best practices on methodology, process improvement and audit tools for digitalization to develop a team of world class, multi-skilled, internal audit professionals.
To keep up with the dynamic risk environment and rapidly changing regulatory and industry requirements, Globe IA has also adopted technology-driven audit processes such as Continuous Auditing (CA), Robotics Process Automation (RPA), Simple, Digital, Agile (SDA) auditing, among others, to improve overall audit efficiency and enhance organizational value.
Globe IA also continuously facilitates self-assessment activities among various business groups to aid management and to foster increasing controls awareness and maturity at Globe.
The Audit and RPT Committee regards Internal Audit as vital support in the effective discharge of the Committee’s oversight role and responsibilities.
Amidst the COVID-19 situation, IA continues to fully deliver its work plan and carry out its mandate through work-from-home arrangements, identification and assessment of the company's emerging risks, and high-level analysis of business impact and corresponding management initiatives and responses to provide reasonable assurance to the Board, stockholders, and other stakeholders that such risks are effectively addressed by Management. These are done through maximized use of relevant technology (e.g. use of laptops, mobile phones, data analytics softwares, secured network access to Globe’s financial and operational systems, use of various communication and teleconferencing software in conducting virtual meetings, town halls, webinars, trainings, performance discussions, check-ins and closer alignment with Management, etc.)
IA participated in Globe's first virtual Annual Stockholder Meeting and ensured its success through validation of shareholder votes from proxies and Voting in Absentia platforms. Significant assistance was also provided in the virtual onboarding of Globe Group's newly appointed external auditors for 2020.
Moreover, the team has actively supported the Company’s Business Continuity Planning initiatives through volunteer hours spent on Customer Experience Management’s quality assurance of subscriber applications to ensure correct plan specifications; and donations through Globe and Ayala fund-raising programs during COVID-19 pandemic.