Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 192 TRAINING The training attended by the Committee members during the financial year is reported under the Statement on Corporate Governance on pages 210 to 211. INTERNAL AUDIT FUNCTION The Group has an independent internal audit function which reports directly to the audit committee, the primary responsibility of which is to provide independent and objective assessment of the adequacy and effectiveness of the risk management, internal control and governance processes established by management and/ or the Board within the Group. The internal audit function adopts a risk-based audit methodology, which is aligned with the risks of the Group to ensure that the relevant controls addressing those risks are reviewed on a timely basis. The activities carried out by the Internal Audit department include among others, the review of the adequacy and effectiveness of risk management and the system of internal controls, compliance with established rules, guidelines, laws and regulations, reliability and integrity of information and the means of safeguarding assets. Such reviews are performed with a view to making recommendations to further improve existing controls and processes. On a quarterly basis, the Internal Audit department monitors and reports to the Committee the implementation of recommendations by Management to ensure all key risks are properly addressed. The Head of the Internal Audit department reports directly to the Chairman of the Committee, and is responsible for enhancing the quality assurance and improvement programme of the internal audit function. Its effectiveness is monitored through continuous internal self-assessment and independent external assessment, and the results are communicated to the Committee. The major internal audit activities undertaken during the year are as follows: • Reviewed the adequacy and effectiveness of critical processes, IT systems and network elements; • Reviewed compliance with established policies and procedures and statutory requirements; • Recommended improvements and enhancements to the existing system of internal control, risk management and governance processes; • Carried out ad-hoc assignments and investigations requested by the Committee and/or Management; • Followed-up on the implementation of recommendations by Management to ensure all key risks are addressed; and • Developed a risk-based annual audit plan. The total costs incurred for the internal audit function for the financial year ended 31 December 2012 amounted to RM5.1 million (2011: RM4.7 million), which included the cost of co-sourcing activities amounting to RM15,900 (2011: RM72,410). The internal audit function fully abides by the provisions of its charter. The internal audit charter is reviewed and approved by the Committee annually and complies fully with the Institute of Internal Auditors’ International Professional Practices Framework. TERMS OF REFERENCE OF THE COMMITTEE The Committee is governed by its terms of reference which have been applied by the Group throughout the year. The following is a summary of the Committee’s terms of reference: 1. Status The Committee is a committee of the Board of Maxis Berhad. 2. Function The function of the Committee is to assist the Board in fulfilling its oversight responsibilities. The Committee will review the Group’s financial reporting process, the system of internal controls and management of enterprise risk, the audit process and the Group’s process for monitoring compliance with laws and regulations and its own code of business conduct, as well as such other matters, which may be specifically delegated to the Committee by the Board, from time to time. AUDIT COMMITTEE REPORT Continued AS AT 31 DECEMBER 2012