Page 147 - Full Book_24.4.2021

In Retrospect

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The Will to Suceed

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InternaL auDIt FunCtIOn Methodology and Framework
Independence and responsibilities IAD evaluates the effectiveness of the risk management process and the adequacy and
effectiveness of controls in responding to the risks within the organisation’s governance, Achieving a Leading Repute
The Internal Audit Division (“IaD”) plays operations, information systems and Shariah practices. The IAD has an effective audit
an important role in the governance of methodology to assess the risk profile and vulnerabilities of each auditable area.
BHB in providing independent review and
assessment on the adequacy, efficiency The IAD adopts a risk-based methodology which focuses on the following three (3) |
and effectiveness of risk management, components:
internal control and governance practices i. Impact and likelihood of the inherent risk;
implemented by the Management. ii. The respective controls in place; and
The internal audit function of BHB Paving the Way for a Sustainable Future
and its subsidiaries (save for Syarikat iii. Existence of effective risk transfer and loss impact reduction practices in minimising
Takaful Malaysia Keluarga Berhad) is potential losses from negligence or fraud.
carried out by the IAD of Bank Islam IAD adopts the standards and principles outlined in the Internal Control Framework of
and is independent of the activities or Committee of Sponsoring Organization of the Treadway Commission (“COSO”) and
operations of other operating units in the the objectives set by the Institute of Internal Audit’s International Professional Practices
Group. As outlined in the Audit Charter, Framework which comprises of the core principle for the Professional Practice of Internal
the internal audit function reports to the Auditing, the definition of Internal Auditing and Code of Ethics.
BAEC and administratively to the Chief 141
Executive Officer to ensure independence, Based on the annual risk assessment, the IAD will draw up an audit plan covering all
proficiency and professionalism. audit assignments to be performed over the financial year period. This annual audit plan
will be tabled and approved by the BAEC or the Board of Directors.
The IAD is led by the Chief Internal
Auditor namely Encik Zalfitri Abd Mutalip Scope and resources
(“encik Zalfitri”). Encik Zalfitri has
over twenty (20) years audit experience The BAEC together with the IAD, reviews the adequacy and relevance of the scope,
in the financial and banking industry. functions, resources, procedures, risk based internal audit plans and results of the internal Adhering to the Best Governance Practices
Encik Zalfitri who is qualified with a audit processes. It also reviews and approves the Annual Internal Audit Plan, which
degree in Bachelor of Science in Business includes the audit scope, methodology and practices, timing and resources, assessment
Administration (Finance) and Chartered of risk, comparison of actual versus budgeted time spent on assignments and audit fee.
Professional in Islamic Finance (“CpIF”).
He is also a Certified Internal Auditor for The audit covered during the financial year includes, but is not limited to accounting |
Financial Institution (“CIaFIn”). and finance, legal, secretarial, regulatory and Shariah compliance, human resources,
information technology, corporate communication, strategic management and
The IAD is primarily responsible to subsidiaries.
undertake regular and systemic reviews
in conformance with the International Amongst the key areas reviewed during the financial year ended 2020 are: Laying the Foundation for Financial Growth
Professional Practices Framework and the i. Procurement and Finance;
Internal Audit Charter so as to provide ii. Media and Communication;
reasonable assurance that the risk iii. Corporate Governance;
management process, internal controls iv. Human Resources;
and governance practices of BHB and its v. Regulatory and Shariah Compliance; |
Group are operating satisfactorily and vi. Operation and Risk Management;
effectively and are in line with the Group’s vii. Investments;
goals and objectives. viii. Corporate Strategy;
ix. Information Technology;
The internal audit functions of Bank Islam x. Cyber Security;
and Takaful Malaysia are carried out by xi. Fraud and Bribery; and Additional Information & Disclosure Summary
their respective internal audit divisions. xii. Business Continuity Management.

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24 th AGM Information