GHL System Berhad Annual Report 2020

53 A N N U A L R E P O R T 2 0 2 0 AUDIT AND RISK COMMITTEE REPORT CONT’D INTERNAL AUDIT FUNCTION (Cont’d) The GIA does not have any direct operational responsibility or authority over any of the activities it audited or had engaged in any activity that might impair the internal auditor’s judgement. All internal audit staff declared annually that they were free from any relationships or conflict of interests. The annual audit plan was approved by the ARC to ascertain its scope and coverage of the Group’s activities, including the adequacy of manpower The GIA adopts a risk-based approach towards undertaking internal audit reviews for the Group based on the annual internal audit plan approved by the ARC. The GIA 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 a consistent and concise assessment of the risks posed by the area or function being reviewed. The major activities undertaken by the GIA function are summarised as follows:- a. Prepared, presented, and obtained approval from ARC for the Group’s annual internal audit plan; b. Collaborated with Group Compliance Department to continuously monitor the Group’s compliance with the MCCG Guide, MMLR, the relevant rules and regulations; c. Reviewed the adequacy and effectiveness of internal controls pertaining to key business processes of the Group; d. Undertook follow-up audits on the implementation of action plans committed by Management to ensure all s audit findings highlighted are effectively and adequately addressed; e. Identification of areas of opportunities for improvement in respect of operations and processes; f. 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; g. Reviewed Recurrent Related Party transactions annually; h. Reviewed allocation of ESS shares to Executives; and i. Performed ad hoc audit to address specific management’s concerns. During the FY2020, the GIA had conducted independent reviews on internal control and compliance for the following areas as per the Internal Audit Plan approved by ARC:- a. Merchant Sales Process b. Settlement Process c. Compliance Review The results of all internal audit reviews together with the recommendations were 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. ARC 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 under review was approximately RM290,000. (2019: RM280,000)