Sasbadi Annual Report 2019

PAGE 44 SASBADI HOLDINGS BERHAD AUDIT COMMITTEE REPORT (continued) Internal audit ➣ Reviewed, discussed and approved the outsourced internal auditors’ audit plan (covering the scope of work, subsidiaries being audited, estimated number of man days, audit schedule and reporting timeline) and fees for 2019 before recommending for the Board’s endorsement; and ➣ Reviewed and deliberated on the outsourced internal auditors’ reports as detailed in the Internal Audit Function section below. The Audit Committee took note that, overall, the internal control environment for the functional areas/ sections covered by the outsourced internal auditors for FYE 31 August 2019 is considered “average” where controls are generally in place with some actions for improvement required. Risk management ➣ Reviewed the updated Registry of Risks and Risk Matrix prepared by the Risk Management Team (“RMT”), whereby the total number of risk factors remained. The Audit Committee also take note of the changes in the rating of some of the risk factors. INTERNAL AUDIT FUNCTION The internal audit function of the Group is outsourced to Sterling Business Alignment Consulting Sdn. Bhd., which is independent of the activities and operations of the Group. They carried out review on the adequacy of the internal control system of the Group. The outsourced internal auditors report directly to the Audit Committee. A summary of the work carried out by the outsourced internal auditors in FYE 31 August 2019 is as follows: ➣ Prepared and presented an internal audit plan for 2019 to the Audit Committee. The focus of the internal audit plan for 2019, as approved by the Audit Committee was on major subsidiaries of the Company; ➣ Undertook the internal control assessment in accordance with the internal audit plan for 2019, covering the following subsidiaries and functional areas/sections: • Sasbadi Sdn Bhd, Orbit Buku Sdn Bhd, Sasbadi Online Sdn Bhd and Malaysian Book Promotions Sdn Bhd: – Inventory Management – Procurement • Sasbadi Sdn Bhd: – Sales and Marketing • Sasbadi Sdn Bhd: – Finance and Accounts ➣ Undertook follow-up review on previously reported audit findings to ensure weaknesses identified have been or are being addressed. ➣ Presented the reports on internal control assessment setting out their findings and recommendations, and Management’s responses and actions, to the Audit Committee for deliberation. The fees incurred by the Group in relation to outsourced internal audit function for FYE 31 August 2019 were RM48,000.