EXCEL FORCE MSC BERHAD Annual Report 2018

36 EXCEL FORCE MSC BERHAD (570777-X) ANNUAL REPORT 2018 INTERNAL AUDIT FUNCTIONS (cont’d) Sterling reviews and addresses critical business processes, identifies risks and internal control gaps, assesses the effectiveness and adequacy of the existing state of internal control of the Group and recommends possible improvements to the internal control process. This is to provide reasonable assurance that such systems continue to operate satisfactorily and effectively within the Group. The Internal Auditors use the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control – Integrated Framework as a basis for evaluating the effectiveness of the internal control systems. Each quarterly audit is engaged by approximately 2 to 4 audit personnel depending on to the areas of audit. Quarterly audit reports and status report on follow up actions were tabled to the Audit Committee and Board during its quarterly Audit Committee Meetings. The Internal Auditors are free fromany relationships or conflict of interest, which could impair their objectivity and independence of the internal audit function. The Internal Auditors do not have any direct operational responsibility or authority over any of the activities audited. The Audit Committee is of the opinion that the internal audit function is effective and able to function independently. For the financial year ended 31 December 2018, four (4) internal audit reviews had been carried out by Internal Auditors: - Audit Period Reporting Month Name of Entity Audited Audited Areas January - March 2018 May 2018 Excel Force MSC Berhad • Human Resources and Administration functions April - June 2018 August 2018 Excel Force MSC Berhad • Project Management July - September 2018 November 2018 Excel Force MSC Berhad • Customer Service • Management Information Services October - December 2018 February 2018 Excel Force MSC Berhad • Research and Development • Quality Assurance As we conduct four (4) internal audit reviews as compared to three (3) internal audit reviews in previous year, each department core function will be audited in a more regular basis and hence will enhance the adequacy and effectiveness of the internal control system. Follow up status reviews were also carried out to ensure weaknesses identified have been or are being addressed. During the financial year under review, Sterling presented their follow up status reports on previously reported audited findings in respect of the following functional scopes of the Group: Reporting Month Name of Entity Audited Functional Scopes May 2018 Excel Force MSC Berhad • Customer Service functions reported in Nov 2016. • Research & Development functions reported in August 2017. • Finance & Accounts and Procurement functions reported in Nov 2017. August 2018 Excel Force MSC Berhad • Customer Service functions reported in Nov 2016. • Human Resources and Administration functions reported in May 2018. November 2018 Excel Force MSC Berhad • Human Resources and Administration functions reported in May 2018. • Project Management functions reported in August 2018. February 2019 Excel Force MSC Berhad • Human Resources and Administration functions reported in May 2018. • Project Management functions reported in August 2018. • Customer Service and Management Information Services functions reported in November 2018. Based on the internal audit reviews conducted, none of the weaknesses noted have resulted in material losses, contingencies or uncertainties that would require separate disclosure in this Annual Report. Statement On Risk Management And Internal Control (cont’d)