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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
Audit Committee
Report
(cont’d)
D.
AUTHORITY
The Committee shall have the authority to:-
1. Investigate any matter within its terms of reference;
2. Have the resources which are required to perform its duties;
3. Have full and unrestricted access to an information which it requires in the course of performing its duties;
4. Have direct communication channels with the internal and external auditors;
5. Obtain independent/external professional or other advice and to secure the attendance of outsiders with relevant
experience and expertise if it considers this necessary; and
6. Convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other
Directors and employees of the Company, whenever deemed necessary.
E.
SUMMARY OF WORKS DURING THE FINANCIAL YEAR
The principal activities undertaken by the Committee during the financial year are summarised as follows:-
1. Reviewed the unaudited quarterly and year-end financial statements prior to recommending the same for the
Board’s approval, focusing particularly on significant and unusual events and compliance with accounting
standards and other legal requirements;
2. Reviewed the appointment of the external and internal auditors, their independence and effectiveness, and their
fees;
3. Reviewed the external auditors’ audit planning memorandum, comprising their scope of audit, key audit areas,
audit approach and timetable;
4. Met with the external auditors three (3) times during the year without the presence of the Executive Directors and
Management to review the audit report and discuss relevant issues and obtain feedback;
5. Reviewed the external auditors’ management letter and recommendations regarding opportunities for improvement
to internal controls based on observations made in the course of the audit;
6. Reviewed the adequacy of the scope, functions, competency and resources of the internal audit function, and that
it has the necessary authority to carry out its work;
7. Reviewed the scope and results of the internal audit procedures as well as Management’s response to
recommendations for improvement, and evaluation of adequacy of the internal control system based on the
reports from the internal auditors;
8. Reviewed the related party transactions within the Group;
9. Reviewed semi-annually the summary reports on risk management of the Group as presented by the Risk
Management Units on the status of risks faced by the Group and action plans deployed to manage the risks
concerned;
10. Reviewed the Group’s financial and accounting policies and practices; and
11. Evaluated the performance of the external auditors’ function based on timeliness, competency, adequacy of
resources to achieve the agreed scope of audit, and assistance given by the employees of the Group to the
external auditors before recommending the re-appointment of external auditors to the Board.
The meeting dates for the Audit Committee meeting are pre-planned and communicated to the auditors in advance for
them to prepare the Audit Review Memorandum, Audit Planning Memorandum and Audited Financial Statements for
presentation to the Audit Committee to meet the respective deadlines.
The Audit Committee noted the internal control deficiencies or areas of improvement identified by the Internal Auditors
and action plan for corrective actions or improvement by Management.