KENANGA ANNUAL REPORT 2020

79 ANNUAL REPORT 2020 // KENANGA INVESTMENT BANK BERHAD e. The AC, at its meeting on 29 April 2020, had deliberated the revised Internal Audit Manual and implementation of the Internal Auditor’s Annual Declaration Form with the objectives of: i. incorporating the revision to the Internal Audit ( “IA” ) procedures subsequent to the implementation of the Audit Management System; and ii. inclusion of new procedures to be in line with the requirement under the International Professional Practices Framework of The Institute of Internal Auditors. f. Given the significance of IA function in safeguarding a company against weaknesses in riskmanagement, internal control and with the heightened emphasis placed on the effectiveness of IA function in the Malaysian Code on Corporate Governance, Bursa Securities, together with the Institute of Internal Auditors Malaysia had, in 2019, conducted a thematic review on IA function of forty (40) selected public listed companies ( “PLCs” ). The review focused on seven (7) criteria of the IA function, namely: i. Adoption of a recognised IA framework; ii. Independence and objectivity; iii. Planning the audit; iv. Effectiveness of IA function; v. Resource management; vi. Communicating audit results; and vii. Monitoring progress. This study revealed a wide gap, especially in five (5) of the aforementioned seven (7) criteria, pertaining to the work of the IA function in meeting the needs of the PLC. The study further highlighted that the AC of the PLCs, being tasked with overseeing the IA function, should consider the following measures to enhance the IA function in terms of competency of personnel, standards deployed in IA and the overall quality of work performed: i. adoption of a recognised framework; and ii. on-going education for ACs on their roles pertaining to the IA function. The AC at its meeting on 27 October 2020, had noted that from KIBB’s perspective, all the aforementioned seven (7) criteria of the IA function had been adopted. However, based on the key takeaways from the thematic review, the disclosures in KIBB’s Annual Report might be further enhanced in terms of the extent of details to be disclosed for transparency purpose. 3.4 Regulatory Examinations/ Inspection Report As stipulated in its TOR, the AC also deliberates on reports issued by the regulators arising from their examinations or inspections on entities within KIBB Group. This is to ensure proper implementation of appropriate remedial and corrective measures in respect of the findings arising from examinations/ inspections conducted by the regulators. During the year, at its meeting on 5 June 2020, the AC had deliberated on BNM’s 2019 Composite Risk Rating Assessment on KIBB. In its deliberation, the AC not only discussed in detail the findings, areas for enhancement and recommendations made by the regulator, but also on the action plans identified by Management to address those findings and implement the recommendations.