EXCEL FORCE MSC BERHAD 37 INTERNAL AUDIT FUNCTIONS (CONT’D) Sterling reviews and addresses critical business processes, identifies risks associated with the internal control gaps, assesses the effectiveness and adequacy of the existing state of internal control of the Group and recommends possible improvements to the internal control process. This is to provide reasonable assurance that such systems continue to operate satisfactorily and effectively within the Group. The Internal Auditors use the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control – Integrated Framework as a basis for evaluating the effectiveness of the internal control systems. Each quarterly audit is engaged by approximately 2 to 4 audit personnel depending on the areas of the audit. Quarterly audit reports and status reports on follow-up actions were tabled to the AC and the Board on quarterly basis. The Internal Auditors are free from any relationships or conflicts of interest, which could impair their objectivity and independence of the internal audit function. The Internal Auditors do not have any direct operational responsibility or authority over any of the activities audited. The AC is of the opinion that the internal audit function is effective and able to function independently. For the financial year ended 30 June 2023, six (6) internal audit reviews had been carried out by Internal Auditors:- Audit Period Reporting Month Name of Entity Audited Audited Areas January 2022 - March 2022 May 2022 Excel Force MSC Berhad • Human Resources and Administration. April 2022 - June 2022 August 2022 Excel Force MSC Berhad • Customer Service. July 2022 - September 2022 November 2022 Insage (MSC) Sdn Bhd • Project Management. October 2022 - December 2022 February 2023 Excel Force MSC Berhad • Management Information Services. January 2023 - March 2023 May 2023 Excel Force MSC Berhad • Sales and Marketing. April 2023 - June 2023 August 2023 Excel Force MSC Berhad • Project Management. Follow-up status reviews were also carried out to ensure weaknesses identified have been or are being addressed. During the financial year under review, Sterling presented their follow-up status reports on previously reported audited findings in respect of the following functional scopes of the Group: Reporting Month Name of Entity Functional Scopes May 2022 Excel Force MSC Berhad • Research and Development and System Design reported in February 2022. August 2022 Excel Force MSC Berhad • Human Resources and Administration reported in May 2022. November 2022 Excel Force MSC Berhad • Customer Service reported in August 2022. February 2023 Insage (MSC) Sdn Bhd • Project Management reported in November 2022. May 2023 Excel Force MSC Berhad • Management Information Services reported in February 2023. August 2023 Excel Force MSC Berhad • Management Information Services reported in February 2023. • Sales and Marketing reported in May 2023. Based on the internal audit reviews conducted, none of the weaknesses noted have resulted in material losses, contingencies, or uncertainties that would require separate disclosure in this Annual Report. THE KEY ELEMENTS OF THE GROUP’S INTERNAL CONTROL SYSTEM INCLUDE: 1. Organisation structure with defined lines of responsibility, authority and accountability; 2. Policies and procedures for key business processes are formalised and documented for implementation and continuous improvements; 3. Quarterly Board meetings and periodical management meetings are held where information is provided to the Board and management covering financial performances and operations; 4. Training and development are provided as and when required by employees with the objective of enhancing their knowledge and competency; 5. Management accounts and reports are prepared regularly for monitoring of actual performance. Statement on Risk Management and Internal Control (Cont’d)
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