Bank Islam Integrated Annual Report 2020

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT The Board is responsible for determining both the nature and extent of the Bank’s risk management and internal control framework to ensure the Bank remains resilient and sustainable. The Board ʍǁȈɽ ծ KʯƃȴȈȶƃɽȈɁȶ :ɁȴȴȈɽɽljlj ӯ9 K:Ӱ ƃȶǁ ɽȃlj 9Ɂƃɨǁ ĄȈɰȟ :ɁȴȴȈɽɽljlj ӯ9Ą:Ӱ assist the Board in discharging these duties. Accountability and Audit The Board is committed to provide a fair and objective assessment of the financial position and prospects of the Bank in the quarterly financial results, ƃȶȶʍƃȢ ǹȈȶƃȶƺȈƃȢ ɰɽƃɽljȴljȶɽɰӗ ȶȶʍƃȢ ĄljɥɁɨ ɽ ɰ ƃȶǁ ƃȢ Ȣ Ɂɽȃljɨ ɨljɥɁɨ ɽ ɰ Ɂɨ statements to shareholders, investors and applicable regulatory authorities. Boa r d Aud i t & Exami na t i on Committee (BAEC) ěȃlj 9 K: Ȉɰ ljɰɽƃƹȢȈɰȃljǁ ƹʰ ɽȃlj 9Ɂƃɨǁ ƃȶǁ ƺɁȴɥɨȈɰljɰ ǹ Ȉʤlj ӯѸӰ ȴljȴƹljɨɰӗ ƃ majority of whom are Independent ÇKAɰӝ ěȃlj :ȃƃȈɨȴƃȶ Ɂǹ ɽȃlj 9 K: Ȉɰ appointed by the Board and is not the Chairman of the Board. ÇɁȶlj Ɂǹ ɽȃlj 9 K: ȴljȴƹljɨɰ Ȉɰ ƃ ǹɁɨȴljɨ key audit partner. :ɁȢȢljƺɽȈʤljȢʰӗ ɽȃlj 9 K: ȴljȴƹljɨɰ ȃƃʤlj ƃ wide range of relevant skills, knowledge and industry experience in discharging their duties. They provide sound advice to the Board on financial reporting, internal audit and the state of the Bank’s risk and internal control environment. ěȃlj 9 K: Ȉɰ ƺȃƃȈɨljǁ ƹʰ ÇɁɨƃȈȶȈ :ȃlj Aƃȶ who is a Member of both the Malaysian Žȶɰɽ Ȉɽʍɽlj Ɂǹ ƺƺɁʍȶɽƃȶɽ ɰ ƃȶǁ ɽȃlj ÃƃȢƃʰɰȈƃȶ ŽȶɰɽȈɽʍɽlj Ɂǹ :ljɨɽȈǹȈljǁ ĀʍƹȢȈƺ ƺƺɁʍȶɽƃȶɽɰӝ ěȃlj 9 K: ȴljȴƹljɨɰ ƃɨlj f inancially literate and are able to understand, analyse and challenge ȴƃɽɽljɨɰ ʍȶǁljɨ ɽȃlj ɥʍɨʤȈljʥ Ɂǹ ɽȃlj 9 K: including the financial reporting process. yʍɨɽȃljɨ ǁljɽƃȈȢɰ Ɂȶ ɽȃlj 9 K:ӗ Ȉɽɰ ƃʍǁȈɽ activities during the financial year under ɨljʤȈljʥ ƃɰ ʥljȢȢ ƃɰ 9 K:Ԇɰ ǹɁƺʍɰ ƃɨljƃɰ ǹɁɨ ѵѳѵѳ ƃɨlj ɰljɽ Ɂʍɽ ʍȶǁljɨ ČK:ěŽÝÇ 9Ӗ 9Ý ĄA :ÝÃÎěěKKČ Ɂȶ ɥƃǼljɰ ѴѸѶ ɽɁ ѴѸѻ Ɂǹ ɽȃȈɰ ŽȶɽljǼɨƃɽljǁ ȶȶʍƃȢ ĄljɥɁɨɽӝ Relationship with External Auditors ěȃlj 9 K: ɨljʤȈljʥɰ ƃȶǁ ƃɰɰljɰɰljɰ ɽȃlj suitability, objectivity and independence Ɂǹ ɽȃlj KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ƃȶȶʍƃȢȢʰӝ ěȃlj appointment or re-appointment of the KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ Ȉɰ ƺƃɨɨȈljǁ Ɂʍɽ Ȉȶ accordance with the requirements set out by the Bank to ensure the independence and objectivity of the KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ƃɰ ɰɽƃɽʍɽɁɨʰ ƃʍǁȈɽɁɨɰ are not compromised. During the financial year under review, ɽȃlj 9 K: ȃljȢǁ Ɂȶlj ӯѴӰ ɰljɰɰȈɁȶ ʥȈɽȃ ɽȃlj KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ʥȈɽȃɁʍɽ ɽȃlj ɥɨljɰljȶƺlj of Management to review the scope and adequacy of the Bank ’s audit process, the annual financial statements and their audit findings. ěȃlj KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ƃȢɰɁ ɥɨɁʤȈǁlj ȶɁȶӸ audi t ser v i ces to the Bank . For ljȶǼƃǼljȴljȶɽ Ɂǹ ɽȃlj KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ɽɁ ɥljɨǹɁɨȴ ȶɁȶӸƃʍǁȈɽ ɰljɨʤȈƺljɰӗ ɽȃlj 9 K: has to be satisfied that the External ʍǁȈɽɁɨɰ ƃɨlj ɰʍȈɽƃƹȢljӗ Ȉȶǁljɥljȶǁljȶɽ ƃȶǁ objective in the provision of such services, there is no element of conflict of interest and the fees chargeable are within the allowable threshold set. ěȃlj 9 K: ʥƃɰ ɰƃɽȈɰǹȈljǁ ʥȈɽȃ ɽȃlj ɧʍƃȢȈɽʰ of audit, performance, competency and sufficient resources provided to the Bank ƹʰ ɽȃlj KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ǁʍɨȈȶǼ ɽȃlj ǹȈȶƃȶƺȈƃȢ ʰljƃɨ ʍȶǁljɨ ɨljʤȈljʥӝ ěȃlj 9 K: was also satisfied that the provision of non-audit services to the Bank by the KʯɽljɨȶƃȢ ʍǁȈɽɁɨɰ ǁȈǁ ȶɁɽ ȈȴɥƃȈɨ ɽȃljȈɨ objectivity and independence as External ʍǁȈɽɁɨɰ Ɂǹ 9ƃȶȟ ŽɰȢƃȴӝ Internal Audit Function Bank Islam has an in-house internal audit function which is carried out by ɽȃlj ŽȶɽljɨȶƃȢ ʍǁȈɽ AȈʤȈɰȈɁȶ ӯŽ AӰӝ ěȃlj Ž A undertakes the audit on entities within the Bank, its subsidiaries and related ɥƃɨɽȈljɰ Ɂǹ ɽȃlj 9ƃȶȟӝ ěȃlj Ž A Ȉɰ ɥɨȈȴƃɨȈȢʰ responsible to undertake regular and systematic reviews in conformance with ɽȃlj ŽȶɰɽȈɽʍɽlj Ɂǹ ŽȶɽljɨȶƃȢ ʍǁȈɽɁɨɰԇ ŽȶɽljɨȶƃɽȈɁȶƃȢ ĀɨɁǹljɰɰȈɁȶƃȢ ĀɨƃƺɽȈƺljɰ yɨƃȴljʥɁɨȟ ƃȶǁ ɽȃlj ŽȶɽljɨȶƃȢ ʍǁȈɽ Charter so as to provide reasonable assurance that the risk management process, internal controls and governance practices of the Bank and its Group are operating satisfactorily and effectively and are in line with the Group’s goals and objectives. ěȃlj 9 K: Ɂʤljɨɰljljɰ ɽȃlj ɥljɨǹɁɨȴƃȶƺlj ƃȶǁ ljǹǹljƺɽȈʤljȶljɰɰ Ɂǹ ɽȃlj ŽȶɽljɨȶƃȢ ʍǁȈɽ function based on the approved key performance indicators, assesses the competency and experience of the ŽȶɽljɨȶƃȢ ʍǁȈɽ ɰɽƃǹ ǹ ƃɰ ʥljȢȢ ƃɰ ɽȃlj adequacy of resources in order for the ŽȶɽljɨȶƃȢ ʍǁȈɽ ǹʍȶƺɽȈɁȶ ɽɁ ƺƃɨɨʰ Ɂʍɽ Ȉɽɰ ʥɁɨȟ ljǹǹljƺɽȈʤljȢʰӝ ěȃlj 9 K: ƃȢɰɁ ljȶɰʍɨljɰ ɽȃƃɽ ɽȃlj ŽȶɽljɨȶƃȢ ʍǁȈɽ ɰɽƃǹǹ ȃƃʤlj ɽȃlj author i t y to di scharge thei r role objectively and independently, free from any relationship or conflict of interest. ěȃlj Ž A ȃƃɰ ƃ ɰɽƃǹ ǹ ɰɽɨljȶǼɽȃ Ɂǹ ѷѶ auditors, all of whom are equipped with the relevant experience and qualifications. ěȃlj :ȃȈljǹ ŽȶɽljɨȶƃȢ ʍǁȈɽɁɨ ӯ:Ž Ӱ Ȉɰ ŹƃȢǹȈɽɨȈ ƹǁ ÃʍɽƃȢȈɥ ʥȃɁ ȃƃɰ ƃ ǁljǼɨljlj Ȉȶ Bachelor of Science in Bus ines s ǁȴȈȶȈɰɽɨƃɽȈɁȶ ӯyȈȶƃȶƺljӰӗ ƃ :ljɨɽȈǹȈƺƃɽlj Ȉȶ ŽȶɽljɨȶƃȢ ʍǁȈɽȈȶǼ ǹɁɨ yȈȶƃȶƺȈƃȢ ŽȶɰɽȈɽʍɽȈɁȶ ӯ:Ž yŽÇӰ ƃȶǁ :ȃƃɨɽljɨljǁ ĀɨɁǹljɰɰȈɁȶƃȢ Ȉȶ ŽɰȢƃȴȈƺ yȈȶƃȶƺlj ӯ:ĀŽyӰӝ 150 Accountabi l i t y Leader ship Financ ial Statement s CORPORATE GOVERNANCE OVERVIEW STATEMENT