INTERNAL AUDIT FUNCTION The Group has outsourced the internal audit function to a professional service firm, which is independent of the activities and operations of the Group, to review the adequacy and effectiveness of the internal control system of the Group. The outsourced internal auditors, which report directly to the Audit Committee, conducted internal control assessment on the Group in order to identify areas for improvement, besides compliance with internal best practices, guidelines and objectives. During the financial year under review, the outsourced internal auditors have carried out an internal control assessment based on the internal audit plan for the FYE 31 August 2024 as approved by the Audit Committee, covering the following subsidiaries and functional areas/sections: i. The Malaya Press Sdn Bhd and Big Tree Publication Sdn Bhd " Finance and Accounts, in respect of billing and revenue recognition processes and procedures, collection and receivables processes and procedures, credit application and evaluation processes and procedures, payment processes and procedures, cash flow management processes and procedures, limits of authority, intercompany transactions processes and procedures, staff claims processes and procedures, debit note and credit note processes and procedures, capital asset management processes and procedures, procedures for related party transactions / recurrent related party transactions and inventory valuation processes and procedures. " Inventory Management, in respect of warehouse / store management processes and procedures, physical stock handling processes and procedures, receiving and delivery monitoring processes and procedures, backorders monitoring processes and procedures, physical stock count procedures, stock variance justification and verification processes and procedures, stock return handling processes and procedures, inventory system updating and recording processes and procedures, slow-moving and obsolete stocks handling processes and procedures, damaged stock handling processes and procedures and periodic reporting processes and procedures. II. Sasbadi Sdn Bhd " Finance and Accounts, in respect of billing processes and procedures, collection processes and procedures, credit application and evaluation processes and procedures, payment processes and procedures, cash flow management processes and procedures, limits of authority, intercompany transaction processes and procedures, staff claims processes and procedures, debit note and credit note processes and procedures, capital asset management processes and procedures, procedures for related party transactions / recurrent related party transactions and inventory valuation processes and procedures. " Inventory Management, in respect of warehouse / store management processes and procedures, physical stock handling processes and procedures, receiving and delivery monitoring processes and procedures, backorders monitoring processes and procedures, physical stock count procedures, stock variance justification and verification processes and procedures, reporting timeline subsidiary audit coverage, stock return handling processes and procedures, inventory system updating and recording processes and procedures, slow-moving and obsolete stock-handling processes and procedures, damaged stock handling processes and procedures and periodic reporting processes and procedures. iii. Follow-up review on previously reported audit findings to ensure weaknesses identified have been or are being addressed. Upon completion of the work, the outsourced internal auditors presented their reports to the Audit Committee during the quarterly meetings whereby the outsourced internal auditors9 findings and recommendations as well as the Management9s responses and action plans were deliberated. WEAKNESSES IN INTERNAL CONTROLS WHICH RESULTED IN MATERIAL LOSSES, IF ANY During FYE 31 August 2024 and up to the date of approval for issuance of this Statement, there were no material losses incurred by the Group arising from weaknesses in its internal control system. ANNUAL REPORT 2024 HOLDINGS BERHAD 70 Statement On Risk Management And Internal Control (continued)
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