Sasbadi Annual Report 2020

SASBADI HOLDINGS BERHAD 44 AUDIT COMMITTEE REPORT (continued) • Reviewed and discussed with the external auditors on their audit plan for the FYE 31 August 2020 covering the audit scope, audit methodology, timetable and milestones, audit materiality, audit focus areas and reported observations in prior year’s audit, before endorsing and recommending to the Board for adoption; and • Reviewed the audit and non-audit fees of the external auditors for the FYE 31 August 2020 before recommending for the Board’s approval. 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 the FYE 31 August 2020 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 the FYE 31 August 2020 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 during the FYE 31 August 2020 is as follows: • Prepared and presented an internal audit plan for the FYE 31 August 2020 to the Audit Committee. The focus of the internal audit plan for the FYE 31 August 2020, 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 the FYE 31 August 2020, covering the Inventory Management functions of United Publishing House (M) Sdn Bhd and its subsidiaries; • Undertook gap assessment on the Group’s Anti Bribery and Corruption Management System against the recommended best practices as set out in the Corporate Integrity System Malaysia (“CISM”) Framework; • Undertook follow-up review on previously reported audit findings to ensure weaknesses identified have been or are being addressed; and • 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 the FYE 31 August 2020 were RM36,000.