Telus 2010 Annual Report Download - page 117

TELUS 2010 annual report . 113
FINANCIAL STATEMENTS & NOTES: X
Consolidated financial statements contained in this report were being
prepared. In addition, the Chief Executive Officer and the Chief Financial
Officer have also evaluated the design and operating effectiveness of
the Company’s internal control over financial reporting as explained in the
following report entitled Report of Management on Internal Control over
Financial Reporting.
The Board of Directors has reviewed and approved these
Consolidated financial statements. To assist the Board in meeting its
oversight responsibilities, it has appointed an Audit Committee, which
is comprised entirely of independent directors. All the members of
the committee are financially literate and the Chair of the committee has
financial expertise and meets the applicable securities law requirements
as a financial expert. The committee oversees the Company’s accounting
and financial reporting, internal controls and disclosure controls, legal
and regulatory compliance, ethics policy and timeliness of filings with
regulatory authorities, independence and performance of the Company’s
external and internal auditors, management of the Company’s risks, its
creditworthiness, treasury plans and financial policy, and whistleblower
and accounting and ethics complaint procedures. The committee meets
no less than quarterly and, as a standard feature of regularly scheduled
meetings, holds an in-camera session with the external auditors and
separately has the opportunity to meet with the internal auditor without
other management, including management directors, present. It over-
sees the work of the external auditors and approves the annual audit plan.
It also receives reports on the external auditor’s internal quality control
procedures and independence. Furthermore, the Audit Committee reviews:
the Company’s major accounting policies including alternatives and
potential key management estimates and judgements; the Company’s
financial policies and compliance with such policies; the evaluation by
the internal auditors of management’s internal control systems; and the
evaluation by management of the adequacy and effectiveness of the
design and operation of the Company’s disclosure controls and internal
controls over financial reporting. The Audit Committee also considers
reports on the Company’s business continuity and disaster recovery
plan; reports on financial risk management including derivatives exposure
and policies; tax planning, environmental, health and safety risk man-
agement, corporate social responsibility and management’s approach for
safeguarding corporate assets; an annual review of the Chair of Board
of Directors, Chief Executive Officer and Executive Leadership Team
expenses and their use of corporate assets; and regularly reviews mate-
rial capital expenditure initiatives. The committee pre-approves all audit,
audit-related and non-audit services provided to the Company by the
external auditor (and its affiliates). The committee’s terms of reference
are available, on request, to shareholders and at telus.com/governance.
Robert G. McFarlane Darren Entwistle
Executive Vice-President President
and Chief Financial Officer and Chief Executive Officer
February 24, 2011 February 24, 2011
Management is responsible to the Board of Directors for the preparation
of the Consolidated financial statements of the Company and its sub-
sidiaries. These financial statements have been prepared in accordance
with Canadian generally accepted accounting principles and necessarily
include some amounts based on estimates and judgements.
The Company maintains a system of internal controls that provides
management with reasonable assurance that assets are safeguarded
and that reliable financial records are maintained. This system includes
written policies and procedures, an organizational structure that seg-
regates duties and a comprehensive program of periodic audits by the
internal auditors. The Company has also instituted policies and guide-
lines that require TELUS team members (including Board members and
Company employees) to maintain the highest ethical standards, and has
established mechanisms for the reporting to the Audit Committee of
accounting and ethics policy complaints. In addition, the Chief Compliance
Officer works to ensure the Company has appropriate policies, controls
and measurements in place to facilitate compliance with all legal and
regulatory requirements. Annually, the Company performs an extensive
risk assessment process (updated quarterly), which includes interviews
with senior management, a web-enabled risk and control assessment
survey distributed to a large sample of employees, a survey of the
TELUS Board and input from the Company’s strategic planning activities.
Included in this process are the identification and prioritization of key
enterprise risks, the assessment of risk appetite and tolerance by risk
category, and the assessment of the perceptions of the strength of
the internal control environment. Results of this process influence the
development of the internal audit program, which is reviewed with
and approved by the Audit Committee. Key enterprise-wide risks are
assigned to executive owners for risk mitigation responsibility.
As required by Canadian securities regulations and the United
States Sarbanes-Oxley Act, the Company has an effective and efficient
Sarbanes-Oxley certification enablement process. In addition to assess-
ing disclosure controls and procedures and internal control over financial
reporting, this process cascades informative certifications from the
key stakeholders, which are reviewed by the Chief Executive Officer
and the Chief Financial Officer as part of their due diligence process.
The Company performs an annual fraud risk assessment that further
informs their assessment of the internal control environment.
The Company has a formal policy on Corporate Disclosure and
Confidentiality of Information, which sets out policies and practices
including the mandate of the Disclosure Committee.
The Chief Executive Officer and the Chief Financial Officer have
evaluated the effectiveness of the Company’s disclosure controls and
procedures related to the preparation of the Management’s discus-
sion and analysis and the Consolidated financial statements, as well
as other information contained in this report. They have concluded
that the Company’s disclosure controls and procedures were effective,
at a reasonable assurance level, to ensure that material information
relating to the Company and its consolidated subsidiaries would be
made known to them by others within those entities, particularly during
the period in which the Management’s discussion and analysis and the
FINANCIAL STATEMENTS & NOTES
MANAGEMENT’S REPORT