Buscador

Control mechanisms

Apr 30, 2020

Internal Controls

Internal Audit

Description and Responsibilities of the Internal Audit Direction

The Internal Audit Department at Ecopetrol S.A. is responsible for assisting the Audit Committee of the Board of Directors on the performance of the internal control that supports the development of the operations of the Administration, through permanent monitoring by means of assurance and advisory practices, in search of continuous improvement and the generation of value focused on the achievement of the strategic objectives and the strengthening of the management and the Internal Control System, through an integral audit process, evaluating with objectivity and independence the business management.

Some of the main responsibilities of the internal audit function are described below:

  • Design risk-based audit plans, in order to determine the priorities of the internal audit activity. These plans must be consistent with the Organization's goals and must reasonably ensure the Company's Internal Control System.
  • Propose the scope and content of the General Audit Plan, assurance and advisory activities, and ensure their efficient and timely execution.
  • Advise and support the senior management of Ecopetrol S.A. and the Audit Committee of the Board of Directors, in the process of improvement and monitoring of the Internal Control System, under the COSO standard (Committee of Sponsoring Organizations of the Treadway Commission), an international model that guides in critical aspects of corporate governance, business, ethics, internal control, enterprise risk management, fraud and financial reporting throughout the Company.
  • Perform the integral evaluation of the Internal Control System, based on the COSO model, adopted by Ecopetrol S.A.
  • Evaluate and propose improvement actions on the effectiveness of the Company's Risk Management System.
  • Report irregular situations detected in the performance of their duties to the Company's bodies and to the authorities, as appropriate, according to the magnitude of the event detected.

                        

The Internal Audit Department has been structured with an organizational design and a world-class operating model to respond to the major changes and challenges established by Ecopetrol S.A., through the introduction of international auditing standards, implementation of its Quality Management System, development of human talent and adoption of best management practices.

Preserving its objectivity and independence, the Internal Audit Department reports functionally to the Audit Committee of the Board of Directors and administratively to the Presidency of Ecopetrol S.A.

External Controls

Control Entities and Mechanisms

External Controls

Statutory Auditor: (Control of legal origin because Ecopetrol S.A. is a Mixed Economy Company, of a commercial nature, organized as a corporation). Ecopetrol S.A. has a Statutory Auditor and his respective alternate, both elected by the General Shareholders' Meeting for the same term as the Board of Directors.

Ecopetrol S.A. has a Statutory Auditor with his respective alternate, both elected by the General Shareholders' Meeting for the same period as the Board of Directors.

On a permanent basis, the management will keep the latest report of the Statutory Auditor, together with its annexes and the detail of the findings and qualifications presented, permanently available to the market and the shareholders, on Ecopetrol S.A.'s web page www.ecopetrol.com.co or the one that takes its place, at the disposal of the market and the shareholders.

  • Superintendencia de Servicios Públicos Domiciliarios (Superintendency of Public Utilities): (Degree of supervision of legal origin because Ecopetrol S.A. is subject to Law 142 of 1994, which establishes the regime of public utilities).

    It is the obligation of Ecopetrol S.A., since it is subject to the permanent control and surveillance of this Superintendency, to keep it informed about the economic and legal situation of the Company, to send it the financial and accounting information at the end of the fiscal year, and to submit any other reports it may require.
     
  • Financial Superintendency of Colombia: (Degree of control of legal origin because Ecopetrol S.A. is a securities issuer with securities registered in the National Registry of Securities and Issuers).

    This Superintendency exercises concurrent control over Ecopetrol S.A. because its securities are registered in the National Registry of Securities and Issuers. For this reason, the Company is obliged to keep the Superintendency and the Stock Exchange permanently updated, submitting year-end information, quarterly information and relevant information.
     
  • Superintendence of Corporations: (Legal degree of control due to the fact that Ecopetrol S.A. is a commercial company).

    In exercise of the residual control exercised by this Superintendence over Ecopetrol S.A., the Company is obliged to send it the information requested.
     
  • Superintendence of Ports and Transportation: (Degree of control of legal origin when Ecopetrol S.A. acts as a contractor in port concession contracts).

    This Superintendence exercises oversight functions over Ecopetrol S.A., exclusively in relation to port concession contracts in which the Company acts as a contractor. 
     
  • National Superintendence of Health: (Legal degree of supervision in relation to the Inspection, Surveillance and Control System of the General System of Social Security in Health).

    This Superintendence exercises oversight functions over Ecopetrol S.A., exclusively in relation to the System of Inspection, Surveillance and Control of the General System of Social Security in Health.
     
  • Office of the Comptroller General of the Republic: (Fiscal control because Ecopetrol S.A. is a Mixed Economy Company of the national order).

    Ecopetrol S.A. is subject to the fiscal control of the Office of the Comptroller General of the Republic, which is carried out in accordance with the regulations in force.
     
  • Risk Rating Agencies: (Rating of the internal and external situation of Ecopetrol S.A. for the benefit of shareholders and investors).

    The risk rating agencies analyze for their rating the internal and external situation of Ecopetrol S.A., the management of its business and its different business policies, in order to determine the rating that allows shareholders to know how safe their investment is, and the Company to access capital resources.
     
  • Audits Requested by the Shareholders: (Control of contractual origin established in the Bylaws of Ecopetrol S.A.).

    A plural number of shareholders representing at least five percent (5%) of the Company's subscribed shares, may request the President of Ecopetrol S.A., the performance of specialized audits, under the cost and responsibility of the applicants.

    Investors may request specialized audits in accordance with the nature of their investment, taking into account the above rules and provided they own, at least, individually or jointly, ten percent (10%) or more of the corresponding issue of securities.
Complementary Content
${loading}