Globe™ is a leading telecommunications company in the Philippines. Our mission is to transform and enrich lives through communications by way of our vision of making great things possible.
Through our renewed commitment to "enriching lives through ease and relevance", our goal is to enrich everyday communications by simplifying and removing obstacles in communication technology so that we bring our customers closer to what matters to them most.
We strive to create and deliver products that are relevant to our customers' needs and are easy to understand and use, and are delivered with warmth and knowledge.
It is the policy of Globe Telecom to establish and support an Internal Audit function as a fundamental part of its corporate governance practices. Internal audit is a service, providing an independent, objective assurance and consulting function within the Company, and sharing the organization's common goal of creating and enhancing value for its stakeholders. In providing assistance to the Audit Committee, the Internal Audit Group aims to assist all members of the organization accomplish their objectives by bringing a systematic approach to evaluating and improving the effectiveness of the Company's risk management, control, and governance process.
The Internal Audit Group performs its auditing functions faithfully by maintaining independence from management and controlling shareholders as it reports functionally to the Board, through the Audit Committee, and administratively, to the President & CEO.
The Internal Audit Group governs its work in adherence to The Institute of Internal Auditors' Professional Practices Framework and Code of Ethics, and the Company's Code of Conduct. In compliance with the Institute's standard mandating every internal audit department to have an external quality assessment at least once every five years by a qualified independent reviewer from outside the organization, the group subjected its activities to an external Quality Assurance Review (QAR) in 2007. The QAR is a strategic assessment of an internal audit function, including its infrastructure, staff experience, and performance relative to business goals, best practices, and applicable standards. The independent review resulted to a "Generally Conforms" rating, the highest rating that can be achieved in the QAR process, and which means that the group's activities are conducted in accordance with the International Standards for the Professional Practice of Internal Auditing (ISPPIA).
The Internal Audit Group also provides for continuing personal and professional development of all auditors to equip them in the conduct of reviews, with focus on acquiring familiarity with Globe internal processes and telecom technology, new accounting and auditing standards, fraud investigation skills, and regulatory updates.
The Audit Committee reviews and approves the Annual Internal Audit Work Plan and all deviations therefrom, and ensures that internal audit examinations cover at least the evaluation of adequacy and effectiveness of controls encompassing the Company's governance processes, information systems, reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws, rules, and regulations. The Committee also ensures that audit resources are reasonably allocated to the areas of highest risk. The Committee receives periodic reports on the results of the internal auditor's work, and monitors management's responsiveness to the internal auditor's findings and recommendations.
The Internal Audit Group reviews and assesses the adequacy of its Charter annually to ensure compliance with regulatory requirements and appropriateness for enabling good corporate governance. Any amendments to the Charter are submitted for Audit Committee and Board approval.
The Company also engages the services of an independent auditor to conduct an audit and obtain reasonable assurance on whether the financial statements and relevant disclosures are free from material misstatements. The independent auditors are directly responsible to the Audit Committee in helping ensure the integrity of the Company's financial statements and reporting process.
The appointment of the independent auditor is submitted to the shareholders for approval at the ASM. The representatives of the independent auditor are expected to be present at the ASM and have the opportunity to make a statement on the Company's financial statements and results of operations if they desire to do so. The auditors are also expected to be available to respond to appropriate questions during the meeting.
SyCip, Gorres, Velayo & Company (SGV & Co.) is the appointed principal accountant and external auditor for Globe Telecom. In accordance with regulations issued by the SEC, the audit partner principally handling the Company's account is rotated every five (5) years or sooner. The most recent rotation occurred in 2007.
There were no disagreements with the Company's independent auditors on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
Fees approved in connection with the audit and audit-related services rendered by SGV & Co., pursuant to the regulatory and statutory requirements amounted to P19.1 million for the year ended 31 December 2008 as compared to P15.1 million for 2007.
In addition to performing the audit of Globe Group's financial statements, SGV & Co. was also selected, in accordance with established procurement policies, to provide other services in 2008 and 2007.
The Audit Committee has an existing policy to review and to pre-approve the audit and non-audit services rendered by the Company's independent auditors. It does not allow the Globe Group to engage the independent auditors for certain non-audit services expressly prohibited by SEC regulations to be performed by an independent auditor for its audit clients. This is to ensure that the independent auditors maintain the highest level of independence from the Company, both in fact and appearance.
The Audit Committee has reviewed the nature of non-audit services rendered by SGV & Co. and the corresponding fees and concluded that these are not significant to impair the independence of the auditors.
The aggregate fees billed by SGV & Co. are shown below (with comparative figures for 2007):
| --- | 2008* | 2007* |
|---|---|---|
| Audit and Audit-Related Fees | 19.1 | 15.1 |
| Tax Fees | 0.2 | - |
| All Other Fees | 5.3 | 3.1 |
| Total | P 24.6 | P 18.2 |
* (Amount in millions of pesos)
Audit and Audit-Related Fees. This includes audit of Globe Group's annual financial statements and review of quarterly financial statements in connection with the statutory and regulatory filings or engagements for the years ended 2008 and 2007. This also includes assurance and other services that are reasonably related to the performance of the audit or review of Globe Group's financial statements pursuant to regulatory requirements.
Tax fees. This includes tax consultancy and advisory services outside the scope of financial audits and reviews.
All Other Fees. This includes one-time, non-recurring special projects/consulting services and seminars.
The fees presented above include out-of-pocket expenses incidental to the independent auditor's services.