129 How We Are Governed Financial Statements Shareholders’ Information Additional Information 3.4 Audit Oversight Board Annual Report 2020 Issued by the Securities Commission Malaysia At its meeting on 28 July 2021, the AC had taken note of the Annual Report 2020 issued by the SC’s Audit Oversight Board (“AOB”). In 2019, the AOB had introduced the framework for Annual Transparency Reporting for audit firms to promote greater transparency and stronger accountability for audit quality amongst audit firms. While the Annual Transparency Reporting could contribute meaningfully towards the strengthening of the financial ecosystem in Malaysia, the AOB had to defer the implementation to year 2021 in light of the COVID-19 pandemic. This was to allow the audit firms to focus their immediate attention on maintaining high standards of audit quality while managing the unprecedented challenges posed by the pandemic. Furthermore, the AOB hoped that with this deferment, the audit firms would be able to commit the required resources to produce good quality transparency reports. In 2021, the audit firms that met the aforementioned criteria would be required to produce and share their Annual Transparency Report with the ACs of their PIE3 audit clients. In 2022, the Annual Transparency Report would be required to be made public on the respective audit firms’ website within four (4) months after the audit firm’s fiscal yearend. In meeting the AOB’s expectation, the External Auditors had, at the AC meeting held on 25 January 2022, presented its 2021 Audit Transparency Report as part of the proposal for the External Auditors’ re-appointment in respect of the Financial Year 2022. 3.5 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, the AC had deliberated on three (3) regulatory audit reports as follows: Date of AC Meeting Titles of Regulatory Audit Report 25 January 2021 Final Report on the Inspection by Bursa Malaysia Berhad on KIBB dated 2 December 2020 25 January 2021 Report on BNM’s On-Site Review on Information Technology Operations 27 October 2021 BNM’s Composite Risk Rating Assessment and Supervisory Concerns on KIBB for 2020 dated 25 August 2021 During its deliberation, the AC not only discussed in detail the findings, areas for enhancement and recommendations made by the respective regulators, but also on the action plans identified by Management in addressing the findings and implementing the recommendations. The implementation of the regulator’s recommendations was tracked by Group Regulatory & Corporate Services Division of KIBB and reported to the respective regulators on a quarterly basis until full resolution of all findings raised. 3 Public-interest entities
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