statement on risk management
and internal control
INTERNAL AUDIT FUNCTION
The Internal Audit Function reports directly to the Audit Committee (“AC”). The responsibility of the Internal Audit Function is to evaluate the adequacy and effectiveness of the
internal control processes; report on inadequacies and make recommendations for improvements to the system of internal control. Follow-up reviews are undertaken on audit
issues towards ensuring that the recommendations are adequate and effective. Audit Reports are tabled at the Audit Committee Meetings for deliberation. The annual internal
audit plan is reviewed and approved by the Audit Committee.
OTHER KEY ELEMENT ON INTERNAL CONTROL SYSTEM
Internal control processes which are embedded for effective Group’s operations includes:-
• Clear organisational structure and financial authorisation limits are clearly defined;
• Group policies, including Principles of Business Conduct and Whistle Blowing Policy and Standard Operating Procedures to ensure compliance with internal controls,
relevant laws and regulations;
• Annual business plans of all Business Units are reviewed and approved by the respective Divisional Executive Committee;
• Group budgets are reviewed and approved by the Board;
• Regular Executive Committee meetings at Business Units are held to review the operational and key performance indicators against the approved budget;
• Utilisation of contract tendering and evaluation process for large projects; and
• Weekly report on Group cash position is monitored by Group Treasury.
Periodic site visits to operating units are undertaken by the members of the Executive Committee and/or the members of the Board whenever deemed appropriate.
The Group’s system of risk management and internal control applies principally to WSC and its subsidiaries. Associate companies and joint ventures have been excluded
because the Group does not have full management control and/or majority Board representation.
REVIEWOF THIS STATEMENT
As required by Paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, the external auditors have reviewed this Statement on Risk
Management and Internal Control. Their limited assurance review was performed in accordance with Recommended Practice Guide (“RPG”) 5 (Revised) issued by the Malaysian
Institute of Accountants. RPG 5 (Revised) does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal
control systems of the Group.
43
Wah Seong Corporation Berhad • Annual Report 2014
