Internal control and audit system

GRI 2-12, 2-14, 2-15

Internal audit

The Internal Audit Service (hereinafter referred to as the Service) plays a key role in ensuring the transparency, reliability, and effectiveness of corporate governance. The main objective of internal audit is to independently assess the Company’s financial and economic activities, identify and mitigate risks, and improve the internal control system.

As part of its activities, the Internal Audit Service provides the Supervisory Board with objective information on the current state of the Company, develops recommendations for improving the efficiency of business processes, and helps ensure that the Company’s activities comply with international standards and best practices of corporate governance.

The main tasks of the Service include:

Assessment and control:

Conducting internal audits in accordance with the approved plan;
Monitoring the compliance of financial and economic operations with the Company’s interests;
Analyzing the financial position, major transactions, and transactions with related parties;
Verifying the adequacy of financial risk levels.

Corporate governance support:

Advising on accounting, tax, and financial regulation issues;
Developing and improving internal control and internal audit systems;
Interaction with the Supervisory Board and external auditors.

Analysis and confirmation of financial statements:

Verification of the accuracy of accounting information;
Assessment of damage caused to the company as a result of actions by employees and third parties;
Confirming the accuracy of financial statements disclosed by the company.

Employees of the Service must have at least two years of experience in auditing, financial activities, accounting, or tax control, as well as hold a certificate of internal auditor or relevant higher education. Employees of the Service undergo annual certification conducted by the Company’s Supervisory Board.

The size of the department is determined by the Supervisory Board and must include at least two certified auditors. The head of the department, who has the appropriate qualifications, annually prepares and submits the department’s budget for approval.

Employees of the Service undergo annual certification, and their professional level is maintained through regular training. to avoid conflicts of interest, they may not combine their activities with management positions in the Company, membership in the Supervisory Board, or participation in the management of competing organizations.

In addition to the Internal Audit Service under the Supervisory Board, the Company has a Quality Management and Standardization Service.

The main tasks of the service include:

developing and managing annual audit programs taking into account the Company’s strategic objectives and risk assessments;
conducting independent audits to identify non-compliance and opportunities for improving the efficiency of business processes;
assessing key QMS (Quality Management System) processes for compliance with established requirements, identifying risks and making recommendations for their elimination;
monitoring compliance with regulatory requirements and internal procedures, ensuring the relevance of documentation and internal regulations;
preparing audit reports, including analysis of identified non-conformities, recommendations for their elimination, and monitoring corrective actions;
interacting with the Company’s management and structural divisions to ensure the implementation of recommendations and improvement of processes;
ensuring the independence, objectivity, and confidentiality of audits in accordance with international auditing standards;
applying risk-based and evidence-based approaches to enhance the reliability of conclusions and the effectiveness of audit activities.

Audits of the Quality Management and Standardization Service are conducted annually in accordance with an approved program that takes into account the complexity of processes, previously identified non-conformities, and the Company’s strategic objectives. This allows for the timely identification and elimination of potential risks, as well as the improvement of business processes.

External audit

Uzbektelecom JSC conducts regular external audits to ensure transparency, reliability of financial reporting, and compliance with legal requirements.

The audit for 2024, as of the date of this Sustainability Report, is being conducted in cooperation with FE Audit Company Ernst & Young LLC. The external audit is conducted annually and covers the financial statements, operating processes, and key aspects of corporate governance for the reporting period.

The selection of an independent audit company is carried out on a competitive basis in accordance with the legislation of the Republic of Uzbekistan, which guarantees the objectivity and impartiality of the assessment. The results of the audits are used to further improve the Company’s management system and enhance the trust of shareholders, investors, and other stakeholders.