The management has assessed the effectiveness of the Company’s internal control over financial reporting as
of December 31, 2014. In making this assessment, the management used the criteria established by the Internal
Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Tradeway Commission
COSO. Based on this assessment, management has concluded that as of December 31, 2014, our internal
control over financial reporting was effective.
2. Attestation Report of the Registered Public Accounting Firm
The effectiveness of our internal control over financial reporting as of the date of December 31, 2014 has been
audited by Purwantono, Suherman Surja, an independent and registered public accountants, as stated in their
report which appears in the Consolidated Financial Statements.
3. Changes in Internal Control over Financial Reporting There were no significant changes in internal control
over financial reporting throughout the most recently completed fiscal year that would greatly affect or
reasonably have effect materially on the internal control over financial reporting.
We are committed to continuously improving internal control processes and will continue to review and monitor
the financial reporting controls and procedures to ensure compliance with the requirements of the Sarbanes-Oxley
Act and related rules defined by COSO. We also will continue to devote significant resources to
improve our internal control over financial reporting from time to time.
INTERNAL AUDIT UNIT
Unit of Internal Audit IA plays an active role in exercising control over the Company’s business activities.Head of
Internal Audit UnitThe Internal Audit Unit is led by a Head of Internal Audit, who is appointed and dismissed
by the President Director with the approval of the Board of Commissioners. As of December 31, 2014, the Head
of Internal Audit is Mohammad Nuhin.
A brief profile of Mohammad Nuhin
Served as Head of Internal Audit since 1 May 2014 and appointed to the position based on a decree signed by
the President Director. Since 1989, he has worked with Telkom and its subsidiaries and has had over 19 years of
professional experience in various positions at the management level. He previously served as SVP of
Internal Audit in Telkomsel from July 1, 2012 to April 30, 2014 and as VP of Internal Audit at Telkom from February
1, 2007 to June 30, 2012. Total Number of Personnel of the Internal Audit Unit
At the end of 2014, the number of personnel in Internal Audit unit was 48 people. The details of the internal
audit personnels which are categorized according to their education level are as follow:
Latest Education Total
Percentage
SMU 1
2,0 D2
5 10,4
D3 2
4,2 S1
26 54,2
S2 14
29,2
Total 48
100
Structure and Status of Internal Audit Unit As stipulated in the applicable capital market regulations,
Internal Audit is an independent unit to other units and reports directly to the President Director.
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VP Infrastructure Operations Audit
Rubi Handojo
VP Support Subsdidiary Audit
Purwadi Siswana
AVP Financial Asset Management Audit
Saul Rudy Nikson
AVP Share Service Audit
Joni Pathibang
AVP ICFR Risk Management Audit
Purwoto
Head of Internal Audit
Mohammad Nuhin
AVP Subsidiary Audit
A. Bayu Katon
AVP IT Support Audit
I Ketut Darsumantra
AVP Quality Assurance System Development Audit
Edi Djoko Swasono
AVP Service Delivery Audit
Rahadian Khrisna S
AVP Service Operation Audit
Yanti Iswari
AVP Infrastructure Supply Audit
Imam Santosa
VP Enterprise Management Audit
Purwoto
Telkom’s Internal Audit organizational chart is presented below.
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Internal Audit Charter
Telkom’s Internal Audit unit is equipped with the Internal Audit Charter as a corporate formal document, which
contains a description of the vision, mission, structure, status, duties, responsibilities and authority of the Internal
Unit, including personnel requirements of Internal Auditors. The preparation of Internal Audit Charter is based on
the international standards for professional practice of internal auditing issued by the Institute of Internal
Auditors “IIA” and has been approved by the President Director and Audit Committee based on the Board of
Directors Decision 711 PW000 UTA-002008 regarding Internal Audit Charter of the Company.
Vision, Mission, Duties and Responsibilities of the Internal Audit
Vision As an integral part of the Company, IA has a vision to
be a “Smart Partner” to the Management, Business Unit and Subsidiaries to achieve the objectives of the Company
and to be a driving force in the creation of a disciplined cultureat all levels of the organization through the
implementation of all of lawspolicyregulations proceduresbusiness process.
Mission 1. Providing professional internal audit services and
consultation, objective also independent for management, business unit and subsidiary.
2. Providing assurance of appropriate financial reporting. 3. Guarding internal control implementing actively,
supporting the enhancement of GCG Implementation and evaluating risk management.
The Internal Audit’s vision and mission are implemented through systematic and measurable activities in line with
prevailing standards in each phase of the audit process ranging from the preparation, implementation and
monitoring of follow-up actions. For this purpose, a risk-based audit methodology is used during the
preparation phase of an audit as the primary guideline to determine the auditability of units based on the level
of risk, that is, the higher the risk, the higher is the need for an audit. The risk levels of an audit are based on risks
that have been mapped and defined by the Company as well as the professional assessment by the Internal
Audit itself.
Duties and Responsibilities
To facilitate the risk-based audit paradigm in carrying out its duties and responsibilities, IA has implemented
the Audit Management System “AMS” management tool, an online application to document all of the
implementations of risk based audits via online.
Improvements in IA’s participation are carried out by improving the quality assurance for the companys
operations through audit and non-audit activities. Audits are performed to ensure that potential business risks
are mitigated by effective internal controls. If deficiencies are found in the internal control mechanism of a certain
business process, or when certain risks turned out to be out of control, a substantive test is performed on the
audit object as the next step to find the root cause of the problem.
In addition, as consequence of our dual listing in the Indonesian Stock Exchange IDX and the New York
Stock Exchange NYSE, IA periodically examines and audits the effectiveness and adequacy of internal control
mechanism in terms of financial reporting in line with the Internal Control over Financial Reporting ICOFR
standards. In order to support audit and encourage each unit’s awareness of the importance of internal control,
all relevant business units perform quarterly Control Self Assessment “CSA” over its internal control responsibilities.
Periodically, IA also reviews findings in the CSA to assess their adequacy and make recommendations for
improvements in terms of design and implementation. The next step is to participate in the activities of internal
consulting services. Internal consulting services, among other objectives, focus on the implementation of the
Companys operations classified into infrastructure management of production tools, as well as product
and service support operations, including identification of Group Financial Reporting Risk”GFRR”, preparation
of subsidiaries’ business process and human resource management. Internal consulting activity is more of a
preventative solution to secure that business operations remain in the right direction and within the corridor of
prevailing regulations.
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As part of a company highly committed to successful GCG, IA has an important role in the whistleblower mechanism which is the domain of the Audit Committee and the Executive Investigative Committee “EIC” of which Head of
IA is also the secretary of EIC. Whistleblower mechanism serves to accommodate any “complaint” filed by employees and forwarded to the management. If the Audit Committee and the EIC consider that the complaint needs further
investigations, IA is to prepare follow-up actions as part of the audit assignment.
Findings from such activities are reported to the President Director with a copy for the Audit Committee and later distributed to the respective auditee for follow-ups and corrective measures.
Further controls are necessary to ensure that an auditee has provided adequate response over the results of the audit and consulting service. Operational follow-ups are conducted by the auditee while being monitored by the
IA. For this purpose, follow-ups are limited to significant business process areas with an agreed time frame of completion.
The independence
As set forth in the existing capital market regulations, namely Regulation No. XI.2.7, Internal Audit is an independent unit to other work units and reports directly to the President Director. The Head of Telkom’s Internal Audit is appointed
and dismissed by the President Director upon the approval of the Board of Commissioners. One of the implementations of the independence of the Internal Audit Unit in Telkom is reports sent to the President Director and the Audit
Committee Member of the Board of Commissioners.
Professional QualificationsCertification
To maintain and enhance the competence of auditors in order to be adequate both in quality and quantity and to be able to act in accordance with the scope of the Internal Audit in guarding the Company’s business development,
the Internal Audit continues to make efforts to: 1. enroll Internal Audit’s auditors in training, seminars and workshops of a technical nature; and
2. enroll Internal Audit’s auditors in continuous learning certified, both locally and internationally.
Currently the Company’s Internal Auditor Unit has nine auditors with national certification of Qualified Internal Auditor QIA and six auditors with international certification, consisting of one Certified Fraud Examiner, two
Certified Information Systems Audit CISA, and one Certified Management Audit CMA.
Currently the number of auditors that already have certification both nationally and internationally are as follows:
Type of Certification Total
Qualified Internal Auditor QIA 8
Certified Fraud Examiner CFE 1
Certified Information System Audit CISA 2
Certified Risk Management Audit CRMA 1
Certified Management Audit CMA 1
In 2014, the Internal Audit has actively enrolled its auditors in preparation for international certification such as certified Information System Auditor “CISA” and Certified Internal Auditor “CIA”.
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Telkom Internal Audit’s Active Involvement in Professional Organization Telkom’s Internal Audit has been actively involved in the activities of the Forum Communication of Internal Control
Unit “FKSPI” Indonesia. This forum was established to be a vehicle to improve the quality of supervision and to establish international standard professional auditors. FKSPI members consist of the Internal Audit Unit of state
enterprises, universities and private companies. FKSPI regularly organizes seminars and workshops to improve the competency of its members.
There are nine personal of Telkom’s Internal Audit who are members of the Institute of Internal Auditors IIA. These memberships are as part of the efforts by Telkom’s Internal Audit to be continuously updated with scientific
developments in the field of audit and assurance in the world. Audit and Consultation Implementation in 2014
In accordance with the Internal Audit Annual Work Plan, the Internal Audit Unit has conducted 47 object auditing and consulting for 2014.
Sub Unit Q-I
Q-II Q-III
Q-IV Year-2014
Enterprise Management Audit 4
6 7
6 23
Infrastructure Operation Audit 3
3 3
3 12
Support Subsidiary Audit 2
4 3
3 12
Total IA 9
13 12
12 47
Up to December 31, 2014, the Internal Audit has completed 47 audits consulting and has produced 312 recommendations as follow:
Sub Unit Total
Recommendation Follow-Up Status
Closed Open
Enterprise Management Audit 118
96 22
Infrastructure Operation Audit 218
193 25
Support Subsidiary Audit 88
68 20
Total IA 424
357 67
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