strategies for reaching higher
PROACTIVE AND FLEXIBLE ADAPTATION
INTERNAL CONTROL SYSTEM AND INTERNAL AUDITING OPERATIONS OF PVCFC
Internal control system of PVCFC
Introduction
Research experts at PVCFC
For every business, internal control plays a crucial role in the operations of the entire business value chain, through measures, plans, policies, procedures, and efforts of all members in the organization to ensure that production and business operations are efficient and the set objectives are achieved in the best possible way.
In the operation of the company, PVCFC has been and is effectively utilizing internal control activities, corporate governance, and risk management - three closely related activities that impact each other, providing reasonable assurance for the company to achieve its objectives. In addition, PVCFC always pays attention to pioneering the application of advanced international practices for these activities, including the internal control system according to the COSO IC framework, enterprise risk management system according to the COSO - ERM framework, and management system according to the ISO standard.
In the operation of the company, PVCFC has been and is effectively utilizing internal control activities, corporate governance, and risk management - three closely related activities that impact each other, providing reasonable assurance for the company to achieve its objectives. In addition, PVCFC always pays attention to pioneering the application of advanced international practices for these activities, including the internal control system according to the COSO IC framework, enterprise risk management system according to the COSO - ERM framework, and management system according to the ISO standard.
Objectives
At PVCFC, the internal control system has been operated from early on and is increasingly being improved to maximize effectiveness to satisfy the company’s control. Currently, the company’s internal control system is aiming towards four main objectives:
Regarding financial information system
Hoạt động hệ thống kiểm soát nội bộ đảm bảo giúp PVCFC nâng cao uy tín, mở rộng thị phần, thực hiện các chiến lược kinh doanh của Công ty;
Regarding production and business activities
Internal control activities help PVCFC efficiently use resources during the production and business operations of the company.
High-level strategies, objectives in line with Company’s vision
The internal control activities help PVCFC enhance its reputation, expand its market share, and implement the company’s business strategies;
Compliance with laws and regulations
Internal control activities ensure compliance with legal and regulatory requirements. In addition, internal control guides all members in the organization to comply with the company’s internal policies and regulations, thus enabling that the set objectives are achieved.
3-line model
To ensure stability in the current conditions and sustainable development in the future, PVCFC has built, completed and standardized the internal control system according to the current advanced model, which is the 3-line model (issued in July 2020 by the Institute of Internal Auditors - IIA) based on the characteristics of the enterprise.
The deployed activities
In 2022, PVCFC conducted a review of its entire process and standardized its framework to provide a comprehensive view of the core activities for efficient value chain operation. In addition, it linked the activities of each function comprehensively and established a foundation to help the company determine the number of processes and regulations to optimize operations and avoid wasting resources and time.
The company issued a “Code of Ethics and Conduct in Business” to apply to all members, considered a “handbook” for personal development and organizational building, as well as the basis for PVCFC to establish programs and policies to strive for high governance standards, enhance its position among customers and partners, and raise its competitive value in the market
The company performed well in risk management with close relationship and internal control system activities
The internal control system is built on the basis of identifying, analyzing, and preventing/minimizing potential risks that may affect the company’s objectives. In fact, the company’s QTRR work has been implemented since 2018, starting with the introduction of regulations, processes, risk appetite statements, risk acceptance levels, and risk measurement; and regularly updated to meet management requirements year by year.
Maintained an effective Safety-Quality-Environment system according to international standards ISO 9001, ISO 14001, ISO 45001, ISO/IEC 17020, ISO/IEC 17025.
Applies modern scientific and technological advancements and implement digital transformation to achieve better control.
Performed well in internal control under the supervision of two committees belonging to the Board of Auditing and Risk Management, and the HR Management and Remuneration Committee, to reinforce the monitoring function of the company’s activities.
Furthermore, to ensure the integrity and reasonableness of financial information, increasingly transparent and reliable financial data, PVCFC also began to implement the roadmap to apply financial standards according to IFRS.
The plan for 2023
With the efforts of the leadership and the collective of employees, who have contributed to building the PVCFC internal control system over the years, the effectiveness of the operation has been enhanced, helping the company achieve production and business results beyond the plan. Based on that foundation, PVCFC continues to pioneer the application of advanced regulations in management work as well as the internal control system, towards improving the efficiency and effectiveness of the system.
In 2023, PVCFC continues to implement the work of perfecting the policy framework. In fact, the policy framework is closely linked to the process framework and provides general content support for detailed drafting procedures, regulations, and policies, helping to establish the direction and framework for business operations and serving as a mechanism to control and minimize risks while providing a basis for the company’s inspection and control activities.
At the same time, the company continues to develop policies and reports related to violations and conflicts of interest on the characteristics of the company’s culture, infrastructure, and bases applicable during the operation process. These policies will contribute to promoting and enhancing the sense of ownership of PVCFC officials and employees, and their proactivity and confidence in providing feedback and disclosing information.
Internal auditing activities at PVCFC
The internal auditing at PVCFC is established to carry out independent and objective assurance and consulting activities aimed at increasing the value and improving the company’s activities, helping the company achieve its approach by applying a systematic and principled approach to and improving the effectiveness of risk management, control, and governance processes.
In compliance with the Government’s Decree No. 05/ND-CP dated Jan 22, 2019 on Internal Audit in listed companies, PVCFC has established the Internal Audit function by setting up an Internal Auditing Committee, which reports to the BOM in November 2020.
With the goal of conducting audits, evaluations, and consultations, the Internal Audit function at PVCFC will provide independent and objective assurances and recommendations regarding:
With the goal of conducting audits, evaluations, and consultations, the Internal Audit function at PVCFC will provide independent and objective assurances and recommendations regarding:
The Company’s Internal Control System has been established and appropriately operated to prevent, detect, and handle risks of the Company;
The Company’s management and risk management processes ensure effectiveness and high performance;
The operational objectives and strategic objectives, plans, and tasks that the Company achieves.
In 2022, PVCFC completed the construction of a policy framework for Internal Audit operations that is suitable for the Company’s operational characteristics, including: regulations, procedures, forms, tools for internal auditing operations...
The Internal Auditing Committee has audited functional units according to the approved audit plan by the BOM. The audit results were reported to the BOM, BGD with content that evaluates and concludes on the audited procedures; therefore giving opinions on weaknesses, existing problems, errors, correct, and recommending measures to violations, remedy errors, and handle violations; proposed rational measures to improve and perfect business process policies, internal control systems, and risk management systems of the Company.
With the “risk-oriented” auditing method, prioritizing resources to audit units and processes that are assessed to have high risk levels, PVCFC’s Internal Auditing Committee has evaluated risks based on strategy, production and business objectives, comprehensive activities, regulations, business processes, and Company’s subsidiaries to build a medium-term audit plan (2022 - 2024).
The medium-term audit plan was reviewed and commented on by the Auditing and Risk Management Committee, the Supervisory Board, the Board of General Directors before being submitted to the BOM for approval, as a basis for implementation in 2023 and subsequent years.
PETROVIETNAM CA MAU FERTILIZER JOINT STOCK COMPANY
Lot D, Ward 1 Industrial Park, Ngo Quyen Street, Ward 1, Ca Mau City, Ca Mau Province
2022 PBCM. ALL RIGHTS RESERVED.