52 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 INTERNAL AUDIT FUNCTION (Cont’d) The annual audit plan was approved by the ARC to ascertain its scope and coverage of the Group’s activities, including the adequacy of manpower. The GIA adopts a risk-based approach towards undertaking internal audit reviews for the Group based on the annual internal audit plan approved by the ARC. The GIA incorporated a structured internal audit rating methodology that appraises an overall rating of an audit report by a scoring system. The said system provides the Management and the ARC a consistent and concise assessment of the risks posed by the area or function being reviewed. The major activities undertaken by the GIA function are summarised as follows: a. Preparing, presenting, and obtaining approval from ARC for the Group’s annual internal audit plan b. Collaborating with Group Compliance Department to continuously monitor the Group’s compliance with the MCCG Guide, MMLR, the relevant rules and regulations c. Reviewing the adequacy and effectiveness of internal controls pertaining to key business processes of the Group d. Undertaking follow-up audits on the implementation of action plans committed by Management to ensure all audit findings highlighted are being effectively and adequately addressed e. Identifying of areas of opportunities for improvement in respect to operations and processes f. Attending RMC as an observer to provide the ARC with an independent assessment of the adequacy and reliability of the risk management processes and compliance with risk policies g. Reviewing Recurrent Related Party transactions annually h. Reviewing allocation of ESS shares to Executives i. Performing ad hoc audit to address specific management’s concerns During the FY2021, the GIA had conducted independent reviews on internal control and compliance for the following areas, as per the Internal Audit Plan approved by ARC: a. Risk Management b. Merchant Sales Process c. Financial Controls and Settlement Process d. Compliance Assessment e. Outsourced Service Provider Review The results of all internal audit reviews together with the related recommendations, were presented to the Management for discussion and agreement on necessary corrective action plans. At each ARC meeting, the Head of Internal Audit updates the ARC of the status of ongoing audits and, presents internal audit reports, and observations. Relevant Management personnel are invited to be present during such presentations. Periodic follow-up audits are also performed by the GIA in ensuring corrective actions arising from the previous internal audit findings had been implemented accordingly. ARC considers the results of audits undertaken and evaluates the adequacy of Management’s responses to matters raised. The Company has allocated a reasonable budget to enable the GIA team to attend briefings, conferences, and seminars organised by the relevant professional bodies in order for the GIA team to stay abreast with the latest developments in auditing standards globally. The total cost incurred by GIA in discharging its functions and responsibilities, in respect of the financial year under review was approximately RM310,000. (2020: RM290,000). AUDIT AND RISK COMMITTEE REPORT CONT’D
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