THE BAEC ACTIVITIES IN 2022 Areas of Focus Matters Considered Internal Audit Reviewed and approved the 2023 Internal Audit Plan and Budget which includes the scope, procedures and frequency as well as adequacy and competency of internal audit resources. Reviewed and approved the review of the Internal Audit Charter. Deliberated on 97 Internal Audit Reports on the Head Office, Subsidiaries, Regional Offices, the branches (including limited operational review) as well as Ar-Rahnu and Bureau de Change outlets and identified critical units of BIMB, which amongst others focused on the effectiveness and adequacy of governance, risk management and internal control. Deliberated on 15 Internal Audit Reports on Information System Audit which assessed the adequacy of the information system controls, security including cybersecurity and the necessary back-up systems to cover for contingencies or disaster. Deliberated on nine (9) Shariah Audit Reports on compliance with Shariah rulings. Reviewed the progress of rectification efforts on unresolved audit findings to ensure appropriate corrective actions were taken by the Management in a timely manner to address control weaknesses, policies and other areas identified by the Internal Auditors and other control functions. Reviewed the performance and achievements of the Internal Audit Division for FY2021 and the first half of FY2022. Reviewed 22 investigation reports by Group Internal Audit Division covering cases of staff negligence and potential disclosure of customers’ information. Reviewed the report by Group Internal Audit Division on verification of non-audit services fees incurred by External Auditors. Reviewed and noted the Management Audit Committee’s minutes of meeting. Reviewed and approved the proposed divisional scorecard for FY2022 of Group Internal Audit Division. External Audit Reviewed and deliberated on the External Auditors’ 2022 audit plan encompassing the audit approach, the areas of audit emphasis and audit fees. Reviewed and deliberated on the External Auditors reports on: (i) the audited financial statements for the financial year ended 31 December 2021, which include the key focus area of the audit and internal control matters, on 27 January 2022; (ii) Transparency Report which revealed how the Assurance Practice of the External Auditors places audit quality at the center of everything it does; and (iii) limited review of the unaudited financial statements for the financial period ended 30 September 2022, on 25 October 2022. Evaluated the independence and objectivity of the External Auditors by reviewing the fees and the list of non-audit services provided by the External Auditors. Reviewed and recommended to the Board the re-appointment of the External Auditors. The BAEC’s evaluation was based on the performance, independence and suitability of the External Auditors. It also covers the assessment on the External Auditor’s ability in meeting BIMB’s requirements, business insights and ideas, service efficiency and effectiveness as well as value management. Financial Reporting Reviewed and recommended to the Board the audited financial statements for the financial year ended 31 December 2021; Reviewed the unaudited quarterly and half yearly financial result of BIMB and the Group; Recommended to the Board the proposed interim dividend for the nine (9) months ended 30 September 2022 upon being satisfied with the solvency test, and the Dividend Reinvestment Plan. Related Party Transaction Reviewed related party transactions as disclosed in the financial statements. Integrated Report 2022 204 Board Audit & Examination Committee (BAEC) Report
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