• Held private meetings with the external auditors without the presence of Management twice a year (on 11 February 2014 and 5 November 2014) to ensure that there were no restrictions on the scope of their audit and to discuss any matters that they may wish to present. Financial Results • Reviewed the quarterly and annual financial statement of the Company and Group including Bursa’s announcements, and recommended them to the Board for approval. Corporate Governance • Reviewed and deliberated on the Recurrent Related Party Transactions (“RRPTs”) reports on quarterly basis and reviewed the framework and procedures of RRPTs. • Reviewed and recommended to the Board the Statement on Risk Management and Internal Control, BAC Report and Additional Compliance Information for inclusion in the 2013 Annual Report for approval. • Reviewed the findings of study on company directors’ conflict of interest or potential conflict of interest in the Group and recommended the improvement measures for managing conflict of interest to the Board for approval. • Reviewed and recommended the revised Terms of Reference of the BAC to the Board for approval. Ship Management Audit (“SMA”) • Reviewed the SMA’s quarterly and annual audit reports on the condition and management of the Group’s vessels (including FSO/FPSOs) relating to efficiency and effectiveness of the internal control systems implemented. INTERNAL AUDIT FUNCTION The internal audit function of the Company is carried out in-house by the GIA, which reports functionally to the BAC in discharging its duties. GIA conducts scheduled audits independently to ensure there are effective risk monitoring, internal controls, governance processes and compliance procedures to provide the level of assurance required by the Board. GIA also conducts additional assurance assignments and/ or special reviews upon request by the Management or BAC. In the conduct of their audits, GIA places emphasis on a risk-based auditing where the focus is given on higher risk areas. Audit reviews the adequacy of the identified mitigations and evaluates the effectiveness and efficiency of the controls to mitigate the risk events. The key in solving lapses in internal control is the submission of audit findings, recommendations on audit issues and execution of the Agreed Corrective Actions (“ACA”) which are encompassed in the audit reports. GIA monitors the status of implementation of these ACA through the Quarterly Audit Status Reports, of which, the ACA are recorded and analysed. The consolidated reports are submitted and presented to the MAC and BAC for deliberation and endorsement on a half-yearly basis. Such regular monitoring is essential to ensure the integrity and effectiveness of the Group’s system of internal control. GIA submits their findings and recommendations on audit issues to the MAC for executive review. Subsequently, the reports together with deliberations by the MAC are tabled at the BAC Meetings for decisions. MISC BERHAD - Annual Report 2014 p 138 BOARD AUDIT COMMITTEE REPORT
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