My EG Services Berhad Annual Report 2019

ANNUAL REPORT 2019 85 COMPOSITION AND TERMS OF REFERENCE (CONT’D) The Terms of Reference of the ARMC, during FP2019 were as follows: (cont’d) 8. Duties a) To review with the external auditors on:- z the audit plan, its scope and nature; z the audit report; z the results of their evaluation of the accounting policies and systems of internal accounting controls within the Group; z the assistance given by the officers of the Group to external auditors, including any difficulties or disputes with Management encountered during the audit; and z any other matters the external auditors may wish to discuss in the absence of the Management, if necessary. b) To review the adequacy of the scope, functions and resources and set the standards of the internal audit function. c) To do the following, in relation to the internal audit function:- z review 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; z review the internal audit programme, processes, the results of the internal audit programme and process where necessary to ensure that appropriate actions are taken on the recommendations of the internal audit function; z review any appraisal or assessment of the performance of members of the internal audit function; z review the independency of members of the internal audit function; z approve any appointment or termination of the internal auditors; z take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his/her reasons for resigning; z review the necessary budget allocated to internal audit function; z investigate or cause to be investigated any activity within its Terms of Reference; and z to have explicit authority over the resources such as professional advice and full access to information to investigate certain matters. d) To review with Management: - z audit reports and management letters issued by the external auditors and the implementation of audit recommendations; z interim financial information; and z the assistance given by the officers of the Group to external auditors. e) To review and monitor related party transactions entered into by the Group and to determine if such transactions are undertaken on an arm’s length basis, normal commercial terms, on terms not more favourable to the related parties than those generally available to the public, not detrimental to the interests of minority shareholders, to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise within the Group including any transaction, procedure or course of conduct that raises questions of Management’s integrity. f) To review the quarterly reports on consolidated results and annual financial statements prior to submission to the Board, focusing particularly on:- z changes in or implementation of major accounting policy and practices; z significant and/or unusual matters highlighted including financial reporting issues, significant judgements made by Management, significant and unusual events or transactions and how these matters are being addressed; z the going concern assumption; z compliance with accounting standards and other legal requirements; and z major areas. AUDIT AND RISK MANAGEMENT COMMITTEE REPORT (CONT’D) GOVERNANCE