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Article (1):
These instructions are called internal audit charter of Miyahuna - Jordan Water Company.
Article (2):
The following words and phrases, wherever mentioned herein, shall have the meanings mentioned herein below, unless otherwise indicated in the context:
Company : Miyahuna - Jordan Water Company
Board: Miyahuna - Jordan Water Company Board of Directors.
Chairman: Chairman of Board of Directors of Miyahuna - Jordan Water Company.
Committee : Audit Committee comprised of the Board members.
Department: Internal Audit Department in Miyahuna- Jordan Water Company.
Functional Affiliation:
The Audit Director reports to the Audit Committee in terms of the audit activities. These activities include recommending approvals on the audit charter, audit plan; receiving reports about audit results; recommending the appointment or the dismissal of the department's manager, his/her salary, remuneration and privileges; ensuring that there is nothing to impede the department's work; and ensuring the adequacy of funds allocated in the budget for running its operations in as optimally as possible.
Administrative Affiliation:
It is the subordination from within the organizational structure of the Company which has an effect in facilitating the daily work (such as internal communications, flow of information, handling the internal policies and procedures and administrative accounting). This affiliation should not affect the scope of internal audit activity nor report the results of its operations.
Article (3):
A.
The Department called Internal Audit Department is established in the Company. The official of the Department, regardless of his job rank, is technically connected with the Committee and administratively with the Board of Directors through the Audit
Committee.
B.
Employees in this Department may not perform any executive duties in other departments in the Company.
1 Prepared by Miyahuna, edited by Nancy Barnes with input from Duha Tarawneh
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Article (4):
The internal audit staff adheres to the following:
A.
Applying the International Standards of Internal Auditing and ensuring that the management adheres to the international standards of the International Financial
Reporting; also, adhering to the laws, regulations, instructions and decisions related to the functions of the Company.
B.
Adhering to codes of professional conduct mentioned in the International Standards of
Internal Auditing and the legislation applicable in Jordan.
C.
Following up on the development and advancement of scientific and technical skills as well as keeping up with progress on the auditing profession through continuous training courses.
Article (5):
The Internal Audit should examine and verify the reliability of the financial process as well as the authenticity and accuracy of the documents and ledgers that support it, including means and ways used in chart accounts. It also includes verification of collecting the correct values of the Company rights with their accurate dates and maintaining the assets and properties of the Company.
Article (6):
The auditing activities have to be independent and objective so as to present assurances and consultations for the Executive Management of the Company with the aim of assisting it to achieve its targets in a methodological and organized approach in order to evaluate and improve the efficiency of managing risks, control and corporate governance, and the
Department shall perform the following tasks:
A.
Ensure all activities in the Company (financial and administrative, technical and service) are implemented according to laws, regulations, instructions, standards and decisions issued in this respect.
B.
Ensure that all the Company records, accounts and reports reflect fairly the Company financial position and verify the correctness and entry of accounting transactions in ledgers and entry to accounting software. Moreover, shall prepare the reports, financial statements and ensure that they are in conformity with International Financial
Reporting Standards applicable in Jordan. Also ensure that the trial balance, general ledger and all accounts are balanced.
C.
Field supervision to evaluate the Company performance to compare the Company achievements with the estimated budget, identify deviations and their reasons and report them to the Board of Directors through the Audit Committee.
D.
Follow up on collecting revenues on time and recording revenue according to accounting rules.
E.
Conduct financial studies and analysis as well as prepare any reports within this context at the request of Board of Directors or the Audit Committee or whenever needed.
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F.
The internal auditor exercises his tasks according to an annual plan.The Board of
Directors or the Audit Committee may assign the internal auditor any additional control tasks.
G.
Follow up the execution of decisions and recommendations of the Committee and periodically report to the Board of Directors through the Audit Committee.
H.
Coordinate with external auditors and other control authorities in regard to providing and exchanging of information as well as answering their queries and comments in cooperation with the concerned departments in the Company, in addition to following up on rectifying violations and recommendations mentioned in their reports.
I.
Prepare periodic and monthly reports, when necessary and when requested, as for audit and control process and submit these reports to the Board of Directors through the
Audit Committee.
J.
Inform the Board of Directors through the Audit Committee immediately about any substantial violations detected during the auditing process and provide them with any documents they request.
K.
Evaluate whether the control systems are sufficient for reducing the risks faced by the
Company. Also, submit the appropriate recommendations for rectifying the weak points and present an annual report in this regard to the Boards of Directors through the Audit
Committee.
L.
Do the necessary investigation procedures in the Company and within the Company's business and also in cases that require it and report the results of the investigation to the
Board of Directors through the Audit Committee.
Article (7):
Information obtained by the internal auditor during the course of work and the reports he submits are confidential.
Article (8):
Departments that receive reports are committed to reply to them as soon as possible after receiving them. The replies and the internal auditor’s opinion shall be attached and submitted to the Audit Committee.
Article (9):
The concerned executive parties at the Company must provide all necessary facilities to ensure that the external auditor or the internal auditor exercises the tasks entrusted to him in the best way possible and to supply him with all decisions, documents and records he requests.
Article (10):
The internal auditor is committed to perform his tasks in full independence. He should make the required effort with total objectivity and rational professional precaution to accomplish his work. He should be well trained, experienced and consistently up to date.
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Article (11):
The internal auditor conducts periodically during the year a spot inventory check on the
Company funds, advances and loans, fixed assets and safes. He submits his reports in this regard at the time to the Board of Directors through the Audit Committee; all concerned employees must comply with the auditor’s requests and execute them immediately. All concerned employees must ensure that all money, whether in cash or cheques, shall be kept in iron safes, and these amounts must be supplied to banks that deal with the Company according to the monetary policy and liquidity management accredited in the Company.
Article (12):
The department participates in committees as an observer.
Article (13):
Each employee must sign the (independence) form, acknowledging that there was no conflict of interest or relatives to the fourth degree with the department’s employees subject to audit or take any benefit through the Auditing. They also shall sign an avowal of maintaining secrecy and commitment to audit ethics.
Article (14):
The relationship between the Internal Audit department and the Audit Committee is summarized as follows:
A.
The official of the Department, regardless of his job rank, is technically connected with the Committee and administratively with Board of Directors through the Committee.
B.
The committee approves the plan and work program of the Department and makes adjustments to it.
C.
The Audit Department presents its monthly report with a summary to the Audit
Committee.
D.
The Audit Department periodically reports to the Audit Committee about the commitment to implement the recommendations.
E.
The Audit Department shall inform the Audit Committee immediately about any substantial violations detected during the auditing process.
F.
The Audit Committee may assign the internal audit department any additional tasks and guidance on how to implement the work.
Article (15):
The relationship between the Internal Audit Department and the other departments is summarized as follows:
A.
All parties at the Company must cooperate with the Internal Audit Department to support completion of its work and to supply it with all documents and records requested as well as answering their queries.
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B.
All employees in the Internal Audit Department shall apply effective communication skill and respect in dealing with the Company's employees.
C.
The Internal Audit Department shall discuss observations resulting from the audit process with the auditee before presenting its report to the Committee
Article (16):
The relationship between the Internal Auditor and the External Auditor is summarized as follows:
A.
The Audit Department shall help the external auditor in obtaining information requested.
B.
The Audit Department shall respond to inquiries and observations of the external auditor after discussion with the Committee.
C.
The Internal Audit Department shall coordinate with the external auditor to prepare financial endorsements.
Article (17):
This Charter comes into force as of the date of the approval thereof by the Board upon
Committee recommendation.
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