ANNUAL REPORT 2015 |
71
REPORT OF THE AUDIT & RISK MANAGEMENT COMMITTEE
3.0 Authority
3.1 The ARC shall have the following authority as empowered by the Board:-
i.
to investigate any matter within its ARC Charter;
ii.
have the resources which are required to perform its duties;
iii. have full and unrestricted access to any information pertaining to the Group;
iv. have direct communication channels with the external auditors, internal auditors, as well as all directors and
employees of the Group; and
v.
to obtain independent professional or other advice as necessary.
4.0 Duties and Responsibilities
4.1 The ARC shall examine the Group’s matters pertaining to the financial reporting, risk management and internal control,
internal and external audit processes, related party transaction and conflict of interests situation, and to submit to the
Board its recommendation and/or reports on matters within its purview or other matters of the Group referred to it by the
Board, for the Board’s consideration.
4.2 The ARC shall, amongst others, discharge the following functions:-
4.2.1 to review the quarterly results to Bursa Malaysia Securities Berhad and year end financial statements of the Group
before submission to the Board, focusing particularly on:
i.
the going concern assumption;
ii.
any changes in or implementation of accounting policies and practices;
iii. significant issues and unusual events;
iv. significant audit adjustments;
v.
compliance with accounting standards, regulatory and other legal requirements for financial reporting; and
vi. major judgmental areas.
4.2.2 to review the following matters with the external auditors, and report the same to the Board:-
i.
the audit plan;
ii.
the audit reports;
iii. the external auditors’ evaluation of system of internal control;
iv. the problems and reservations arising from the interim and final external audits, and any matters the external
auditors and/or internal auditors may wish to discuss (in the absence of management, where necessary);
v.
the external auditors’management letter and the management’s response thereto; and
vi. the assistance given by the employees of the Group to the external auditors.
4.2.3 to review the external auditors’ terms of engagement, independence, objectivity, remuneration and cost-
effectiveness and to make recommendations to the Board for the appointment, re-appointment or termination of
the external auditors, and to consider any questions of resignation or dismissal including whether there is reason
(supported by grounds) to believe that the external auditors are not suitable for re-appointment.
The ARC shall assess the external auditors or potential external auditors (as the case may be) on a number of
criteria including, but not limit to:-
i.
the independence of the external audit firm from the Group and ability tomaintain independence throughout
the engagement;
ii.
there being no conflict of interest situations that could affect the independence of the external auditors;
iii. the external audit firm’s compliance with Malaysian regulations and ethical guidance relating to rotation of
audit partner and succession planning;
iv. professional competency, experience and integrity of key personnel;
v.
the thoroughness of audit approach and methodology;
vi. audit budget, and
vii. the provision of non-audit services by the external auditors (if any) shall not cause an impairment to the
objectivity and independence of the audit firm.
The ARC shall receive a written assurance from the external auditors confirming that they are, and have been,
independent throughout the conduct of the audit engagement in accordance with the terms of all relevant
professional and regulatory requirements.
Subject to satisfactory performance and the recommendation of the ARC, the Board will recommend the re-
appointment of the external auditors to shareholders at the annual general meeting. If the ARC does not
recommend the incumbent audit firm, a tender process will be carried out by the ARC and executive management
to select a new audit firm.
