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Datasonic Group Berhad
(Company No. 809759-X)
48
B.
INTERNAL AUDIT FUNCTION
The internal audit function is led by the Chief Internal Auditor who reports functionally to the Audit
Committee in accordance with Paragraph 15.27 of the MMLR and administratively to the Managing
Director. The main objective of the Internal Audit function is to assist the Board and the Management
in discharging their responsibilities by providing an independent and reasonable assurances on the
adequacy and effectiveness of the systems of internal control, risk management and corporate
governance processes of the Group.
The purpose, authority and responsibility as well as the scopes of work of the internal audit function
are articulated in the approved Internal Audit Charter. Specifically, the key responsibilities of the
Internal Audit Department include the following:-
1.
Developing an annual risk-based audit plan to be submitted to the Audit Committee for
approval.
2.
Executing the approved audit plan using a risk-based methodology, as well as any special tasks
or assignments initiated by the Board, Audit Committee and Executive Committee.
3.
Issuing periodic audit reports with detailed findings, recommendations and corrective actions
committed by the Management to the Audit Committee for review and approval.
4.
Reporting on a timely basis to the Audit Committee any selected fraud case with appropriate
details.
5.
Undertaking investigation work as instructed and presenting thereafter the results to the Audit
Committee and / or to the Management.
The Internal Audit activities for the financial year ended 31 March 2016 were carried out in accordance
with the Audit Planning Memorandum which has been approved by the Audit Committee. The
planned audit assignments were identified taking into consideration of all possible risk factors of the
Group compiled from the following sources:-
1.
Observation and risks identified from the previous internal audit assignments.
2.
Observation and risks highlighted by the Board Audit Committee.
3.
Discussionwith the ExecutiveCommittee, keymanagement personnel and heads of department.
4.
Review the minutes of Management meetings, relevant reports and materials highlighted and
deliberated in key meetings held throughout the year.
5.
Review the recent strategic business exercises / activities initiated by the Board and the
Management (e.g. proposed acquisition, incorporation of new subsidiaries or business processes
/ key activities).
Internal Audit performed a high-level assessment on the risk factors compiled from the likelihood and
consequence rating for each identified risk which was assigned and populated into the Likelihood
and Consequence Matrix so as to select the significant auditees and related auditable areas for
audit examination. The selected key audit areas for the financial year ended 31 March 2016 which
constituted the subject matters of the audit work carried out by the Internal Audit were as follows:-
1.
Project Management - focusing on project costs monitoring, progress reporting, adherence to
the contract’s terms and conditions, etc.
2.
Plant Operations - focusing on security and inventory management and related areas.
3.
Accounting and Finance - focusing on treasury and management of operating expenditures
from control point of view.
4.
Business Development & Research and Development - focusing on the review and monitoring
of potential projects / research and development projects, etc.
The total costs incurred by the Internal Audit function in discharging its roles and responsibilities for the
working period in the financial year ended 31 March 2016 is amounted to approximately RM300,000.
This Report was made in accordance with the resolution of the Board of Directors passed on 27 May
2016.
AUDIT COMMITTEE REPORT
(Continued)