Page 137 - Bank-Muamalat-Annual-Report-2021

ANNUAL REPORT 2021 135
SUSTAINABILITY STATEMENT OUR GOVERNANCE OUR NUMBERS OTHER INFORMATION

EFFECTIVE AUDIT AND

RISK MANAGEMENT

RISK MANAGEMENT AND INTERNAL RISK MANAGEMENT SYSTEM
CONTROLS
• A common framework through which risk management and control is
The Board, supported by its committees, embedded.
operates within a framework of prudent • Consistent approach throughout the Group to identify, measure, manage,
and effective controls in the interests monitor and report risks.
of shareholders, customers and other • Consistent and comprehensive set of policies are maintained.
stakeholders. The Group’s Governance of
Risk Management and Internal Controls • Risk Management Policy establishes a framework of standard risk
ensures the safety and soundness of the management processes.
Group and its key entities. This is achieved • Risk Management System is underpinned by the ‘Three (3) Lines of
through a robust governance structure Defence’ model.
designed to deliver a well-managed
business with effective decision-making,
good procedures and strong controls. INTERNAL CONTROL SYSTEM
The Group’s Internal Control System sets out the processes and
The Group’s Risk Management and Internal
frameworks required to ensure effective and efficient delivery of the Group’s
Controls governance comprises three (3)
strategic objectives and is designed to identify and mitigate, rather than
elements:
eliminate, the potential risk of failure to achieve business objectives and can
only provide reasonable, not absolute assurance against material financial
The Board and its committees: misstatement or loss. Implementation and maintenance of the Internal
Provides stewardship and strategic Control System is delegated to senior management. The Group has an
direction.
effective Internal Control System which contains administrative and
accounting procedures, an internal control framework, with appropriate
Risk Management System: validation, assurance and reporting arrangements at all levels of the Group,
How risks are identified, measured, a delegated authority framework, and a compliance framework. The internal
managed, monitored and reported. control system is underpinned by the three (3) lines of defence model.

For further details on Effective Risk Management and Accountability, please refer to
Internal Control System: Statement on Risk Management and Internal Control on page 146 of the Annual Report
Policies, procedures and guidelines
introduced to mitigate risks to the Bank.
BOARD ACCOUNTABILITY
Board Audit Committee
THE BOARD AND ITS COMMITTEES
The BAC has discharged their functions, duties and responsibilities well in
BRMC is responsible for reviewing accordance with the Terms of Reference (“TOR”) and efficiently assisted the
and setting the Group’s overall risk Board in making informed decisions on matters relating to the quarterly
strategy and risk appetite, and for results, year end financial statements, assessment of external auditors and
approving the risk management policies. internal audit function.
BAC reviews the effectiveness of the
Internal Control System on an annual The annual assessment on the suitability, objectivity and independence of
basis and carries out assurance on the external auditors, Ernst & Young PLT (“EY”), is undertaken by the BAC
the Financial Control Framework on a and approved by the Board.
quarterly basis. The Board reviewed the
effectiveness of the Bank’s risk management The BAC Report provides an overview of Bank Muamalat’s adequacy and
and internal control systems including financial, integrity of system of internal controls and financial reporting, compliance with
operational and compliance controls and internal policies, procedures and external applicable rules and regulations.
concluded that they were appropriate and had
operated effectively during the year. The BAC's role and focus areas and the Board Audit Committee Report can be found on
page 142 of this Annual Report.