Page 152 - Bank-Muamalat-AR2020

150 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
About Us
ANNUAL REPORT FY2020

STATEMENT ON RISK MANAGEMENT AND

INTERNAL CONTROL

Regulators on how the Internal Audit Division (“IAD”) fulfils organisational status, as well as the authority to perform duties
its mission and measure the effectiveness, performance and without impediment and to address difficult issues with other
quality of internal audit activity. Senior Management.
Internal Audit activity helps the Bank to accomplish its goals Annual Audit Plan
by bringing an objective and disciplined approach to evaluate
and improve the effectiveness of risk management, internal IAD formulated the Annual Audit Plan using a risk-based
control system and governance processes. This function serves methodology, taking into consideration the bank-wide
as an important source of advice for the BAC concerning areas governance, risk and compliance as well as information and
of weaknesses or deficiencies in internal processes to facilitate relevant initiatives completed by other lines of defence. The
appropriate remedial measures by the Bank. Annual Audit Plan and its revision will be reviewed and
approved by the BAC annually.
Internal Audit Division
The audit universe covered during the financial year includes,
The Internal Audit activity of the Bank is under the purview but is not limited to cybersecurity, data management, regulatory
of the Internal Audit Division (“IAD or Division”) which is updates, third party reliance, human capital, governance,
currently headed by the Chief Internal Auditor (“CIA”). business continuity management, sustainability, processes,
system and technology.
The Division serves as an independent function within the Bank
that carries out an independent assessment, consulting activities The results of the audit reviews conducted, including the audit
and provide objective assurance on the state of internal controls, observations, its risks, audit recommendations, Management’s
risk management, and governance processes established within responses and action plans are reported to the BAC regularly
the Bank to the Board of Directors through the BAC. for review and deliberation. Rectification of outstanding audit
observations performed by the Management is tracked and
IAD also serves to enhance and protect the Bank’s value by challenged by the Management Audit Committee and the BAC
providing advice and insight on the internal processes in terms on monthly basis to ensure adequate and effective actions taken
of efficiency, effectiveness, and business practicality to achieve are within an appropriate and agreed timeline.
the Bank’s vision and strategic objectives.
Competency
To establish and maintain the internal audit activity’s
position within the Bank, IAD is guided by its Internal Audit IAD continuously encourages auditors to uphold proficiency
Charter which defines the purpose, authority, responsibility, by obtaining relevant professional certifications, which is
accountability, independence and objectivity as well as assessed annually through the Training Needs Analysis.
professionalism and ethical standards.
Additionally, the IAD is guided by the Internal Audit Manual, the OTHER KEY ELEMENTS OF INTERNAL CONTROLS
Internal Audit Policy and the relevant Frameworks in effectively The other key elements incorporated by the Board that
assessing and reporting the adequacy and effectiveness of the contributes to an effective internal controls system include:
design and implementation of the Bank’s overall system of
internal control, risk management and governance. Board Committees

Independence Relevant Board Committees are established to assist the Board in
executing its overall governance responsibilities and oversight
The independence of the IAD is effectively achieved with the function. The Board committees exercise its responsibilities
CIA reports functionally to the BAC and is independent of delegated by the Board to deliberate on matters within the
the activities audited including management decisions on respective scope of responsibility. Each of the committees is
operational matters and internal control processes of other guided by its terms of reference and their minutes of meetings
operating units within the Bank. The functional reporting line to are tabled to the Board. These Committees are authorised to
the BAC provides the CIA with direct access to sensitive matters examine all matters within the scope defined in their respective
and enables sufficient organisational status. An administrative terms of reference and report their recommendations to the
reporting to the CEO also provides the CIA with sufficient
Board.