BIMB Integrated Annual Report 2017

51 Intended Outcome There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.3 The Audit Committee has policies and procedures to assess the suitability, objectivity and independence of the external auditor. Application : Applied. Explanation on application of the practice : BHB has in place a process to consider the appointment/re- appointment of External Auditor, which is in line with BNM’s Policy on External Auditor. The Process requires the AEC to assess the External Auditor’s compliance with qualification criteria set out by BNM, which includes evaluating the independence, objectivity and performance of the External Auditor. Activities in 2017: i. Reviewed and approved the External Auditor’s Audit Plan and Strategy for the year ending 31 December 2017 in 24 October 2017 which outlined its engagement team, materiality, audit scope, audit methodology and timing of audit, involvement of IT specialists and others, independent auditors, significant accounting policies/disclosure, emerging issues, audit focus areas and key milestones; ii. Held two (2) meetings with the External Auditors to review the financial results and areas of concerns identified amongst others are internal control, risks of financial reporting and other fraud, implementation of new Malaysian Financial Reporting Standard (“MFRS”), Directors’ responsibilities, External Auditors’ responsibilities and independence; iii. Met with the External Auditors without the presence of the Management on 25 January 2017 and 24 October 2017 to discuss issues independently without the influence of the Management; iv. Reviewed and recommended for Board’s approval the audit fees and provision of non-audit services by the External Auditor in accordance with established procedures; and v. Complete the annual assessment on the External Auditors for the financial year ended 31 December 2017 prior to recommendation to the Board on its re-appointment. Accordingly, the assessment of External Auditors covered amongst others:- i. Level of knowledge, capabilities, experience and quality of previous work; ii. Level of engagement with the AEC and Board; iii. Ability to provide constructive observation, implications and recommendation in areas which require improvement;