GHL System Berhad Annual Report 2018

G H L S y s t e m S B e r h a d ( 2 9 3 0 4 0 - D ) 42 INTERNAL AUDIT FUNCTION The Group has established an internal audit function as a key component of its internal control appraisal process. The Head of Internal Audit reports independently to the ARC and is guided by a formalised Internal Audit Charter and The Institute of Internal Auditor’s International Professional Practice Framework. The main responsibility of the GIA function is to undertake independent assessments on the adequacy and effectiveness of internal controls pertaining to key areas as follows:- • Reliability and integrity of financial and operational information; • Effectiveness and efficiency of operations; • Safeguarding of assets; and • Compliance with applicable laws and regulations. In attaining this, the GIA adopts a risk-based approach towards undertaking internal audit reviews for the Group based on an annual internal audit plan approved by the ARC. The GIA has also incorporated a structured internal audit rating methodology that appraises an overall rating of an audit report by a scoring system. The said system provides the Management and the ARC for a consistent and concise assessment of the risks posed by the area or function being reviewed. The major activities undertaken by the internal audit function were summarised as follows:- • Developed an annual internal audit plan; • Collaborated with Group Legal and Compliance Department to continuously monitor the Group’s compliance with the MCCG Guide, MMLR, the relevant rules and regulations; • Reviewed the adequacy and effectiveness of internal controls pertaining to key business processes of the Group’s subsidiaries; • Undertook follow up audits on the implementation of action plans committed by Management to ensure all previous audit findings highlighted are adequately addressed; • Identification of areas of opportunities for improvement in respect of operations and processes; and • Attended RMC as an observer to provide the ARC with an independent assessment of the adequacy and reliability of the risk management processes and compliance with risk policies. During the FY 2018, the GIA had conducted independent reviews on internal control and compliance for the following areas as per Internal Audit Plan approved by ARC: • Risk Management; • Operations Process; • Corporate Sales Process; and • Merchant and Physical Card Sales Management. The results of all internal audit reviews together with the recommendations are presented to the Management for discussion and agreement on necessary corrective action plans. At each ARC meeting, the Head of Internal Audit updates the ARC of the status of ongoing audits and where appropriate, presents internal audit reports and observations. Relevant Management personnel are invited to be present during such presentations. Periodic follow up audits are also performed by the GIA in ensuring corrective actions arising from the previous internal audit findings had been implemented accordingly. The Committee considers the results of audits undertaken and evaluates the adequacy of Management’s responses to matters raised. The Company has allocated a reasonable budget to enable the GIA team to attend briefings, conferences and seminars organised by the relevant professional bodies in order for the GIA team to stay abreast with the latest developments in auditing standards globally. The total cost incurred by GIA in discharging its functions and responsibilities, in respect of the financial year was approximately RM260,000. aud i t and r i sk commi t t e e report C O N T ’ D