Internal audit within the Company and its subsidiaries is performed by the Department of Internal Audit and Analysis of Core Business Activities. The candidate to be appointed as the head of the Department of Internal Audit and Analysis of Core Business Activities is approved by the Company’s Board of Directors.
Internal audit is carried out in the following spheres:
1. Internal control system efficiency assessment:
- analysing conformity of aims of business processes, projects, business units in the Company and its subsidiaries to the goals of Transneft Group, the Company and its subsidiaries; checking the efficiency, reliability and integrity of business processes (operations) and information systems, including the reliability of procedures for countering illegal actions, abuse and corruption;
- checking the accuracy of accounting (financial), statistical, managerial and other reports; determining to what extent the results of business processes and activities of the Company’s business units and subsidiaries achieve the set goals;
- determining the adequacy of criteria established for analysing the degree of achievement of the set goals;
- detecting flaws of the internal control system which barred (or bar) Transneft Group, the Company and its subsidiaries from reaching the set targets;
- assessing the results of implementing the measures tailored to eliminate violations and flaws while improving the internal control system taken by the Company and its subsidiaries on all corporate governance levels;
- checking the efficiency and expediency of using resources of the Company and its subsidiaries;
- checking the safety of assets owned by the Company and its subsidiaries;
- checking compliance with the law, Articles of Association and other regulatory documents of the Company and its subsidiaries.
2. Assessing the Risk Management System efficiency:
- checking the sufficiency and maturity of the RMS elements possessed by Transneft Group, the Company and its subsidiaries for efficient risk management;
- checking whether the risks are fully exposed and correctly assessed by the management of the Company and its subsidiaries on all corporate governance levels;
- checking the efficiency of monitoring procedures and other risk management measures;
- analysing information about the materialised risks.
3. Assessing corporate governance:
- checking adherence to business ethic principles and corporate values of Transneft Group, the Company and its subsidiaries;
- checking the order of goal-setting by Transneft Group, the Company and its subsidiaries as well as monitoring their implementation;
- checking the level of regulatory support and information exchange procedures (including regarding risk management and internal control) at all corporate governance levels of Transneft Group, the Company and its subsidiaries, including engagement with stakeholders;
- checking whether shareholders’ rights are respected, including subsidiaries’ shareholders as well as whether interaction with stakeholders is efficient;
- checking the procedures of disclosing information about activities of Transneft Group, the Company and its subsidiaries.
For more information on organising internal audit at Transneft see the Company’s Annual Report.