RISK MANAGEMENT AND INTERNAL CONTROL In the discharge of its responsibility to effectively manage risks across the Group, determining its risk appetite and ensuring the implementation of adequate and appropriate controls, the Board regularly reviews its risk management processes and internal control procedures to enforce a sound system of risk management and internal control to safeguard shareholders’ investments and assets of the Group. The Group’s risk management and internal control systems are consistent with Bursa Securities’ guidance on Risk Management & Internal Control, and Related Financial and Business Reporting issued by the Malaysian Financial Reporting Council and compliant with the requirements of BNM. Apart from having oversight of the Group’s risk management, internal control and financial reporting, the BRC also ensures the required in-depth review into specific financial operational and regulatory areas of the Group’s Business. The Group’s system of internal financial control is primarily aimed at safeguarding the Group’s assets, ensuring proper accounting records are kept, identifying and managing business risks and maintaining compliance with appropriate legislation and regulations. BOARD AUDIT & EXAMINATION COMMITTEE The BAEC comprises three (3) members all of whom are Independent NEDs. The Chairman of the BAEC is not Chairman of the Board. None of the BAEC members is a former key audit partner. The BAEC supports the Board in ensuring that there is a reliable and transparent financial reporting process, and reviews the corporate governance practices and internal control system in ensuring checks and balances within the Group. Bank Islam has in place a procedure to consider the appointment/re-appointment of External Auditors which is in line with BNM’s Policy on External Auditors. The process requires the BAEC to assess the External Auditors’ compliance with the qualification criteria set out by BNM, which includes evaluating the independence, objectivity and performance of the External Auditors. As part of its remit, the BAEC must ensure that the objectivity, independence and effectiveness of the External Auditors are maintained. The key activities and focus areas during the financial year under review are set out in the BAEC Report on pages 225230 of this Integrated Annual Report. PRINCIPLE B EFFECTIVE AUDIT AND RISK MANAGEMENT 221 1 2 3 4 5 6 7 8 9 www.bankislam.com ACCOUNTABILITY
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