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KUMPULAN FIMA BERHAD
(11817-V) |
Annual Report
2016
5.2 Risk Management and Internal Controls
The Board is responsible for overseeing the establishment, implementation and ongoing effectiveness
of the Company’s risk management and internal control system. The Audit Committee provides advice
and assistance to the Board in meeting that responsibility and the role of the former in relation thereto
is described in the Statement on Risk Management and Internal Control of this Annual Report.
The system of internal controls is designed to manage and provide reasonable and not absolute
assurance against the risk of material errors, frauds or losses occurring. The Board however, recognizes
that the system must continually evolve to support the type of business and size of operations of
the Group. As such, the Board will, when necessary, put in place appropriate action plans to further
enhance the Group’s system of internal control.
5.3 Related Party Transactions
All related party transactions are reviewed by the Audit Committee on a quarterly basis. The shareholders
mandate in respect of existing and new recurrent related party transactions is obtained at the AGM of
the Company on an annual basis.
Details of the proposed renewal of shareholders’ mandate for recurrent related party transaction is set
out in the Circular to Shareholders dated 29 July 2016.
5.4 Relationship with Auditors
Through the Audit Committee, the Board has established transparent and appropriate relationship with
the auditors, both internal and external. The role of the Audit Committee in relation to the auditors,
including a summary of activities of the Audit Committee is included in the Audit Committee Report
stated herein.
•
Internal Auditors
The Group’s internal audit function is independent of the activities they audit and is performed with
impartiality, proficiency and due professional care.
The function of the Group’s internal auditors is complementary to, but different from that of
external auditors. It undertakes regular monitoring of the Group’s key controls and procedures –
an integral part of the Group’s system of internal control. An internal audit review highlights major
weaknesses in control procedures and makes recommendations for improvements. Internal Audit
also undertakes investigations on the Audit Committee’s behalf, and follows up on complaints on
matters affecting the Group’s operations.
•
External Auditors
The Group’s independent external auditors fill an essential role for the shareholders by enhancing
the reliability of the Group’s financial statements and giving assurance of that reliability to users
of these financial statements. The external auditors have an obligation to bring any significant
defects in the Group’s system of control and compliance to the attention of Management, the Audit
Committee and the Board. This includes the communication of fraud.