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STATEMENT ON RISK MANAGEMENT AND

INTERNAL CONTROL

One of the key responsibilities of the
• Internal Audit SSC/Shariah committees is to advise
its respective Boards on Shariah
The internal audit function of BHB and its subsidiaries (save for Takaful Malaysia) matters in relation to business
is carried out by the Internal Audit Division of Bank Islam. For Takaful Malaysia, operations and Shariah compliance,
the internal audit function is carried out by its own independent internal audit auditing the operational aspect of BHB
department. and endorsing the zakat computation
and distribution.
INTEGRATED ANNUAL REPORT 2020 undertakes regular reviews of BHB and its subsidiaries’ operations and business and its subsidiaries (save for Takaful
The Internal Audit assesses compliance with policies and procedures and
the effectiveness of the Group’s internal control systems. The Internal Audit
The Shariah audit function of BHB
processes. It examines and evaluates the adequacy and efficiency of financial
Malaysia) is carried out by the Shariah
Audit unit of the Internal Audit Division
and operating controls and highlights significant risks and non-compliance.
of Bank Islam. For Takaful Malaysia,
Where applicable, the Internal Audit will provide recommendations to improve
the management of risks, control and governance processes. The BAEC regularly
by its own independent Shariah
reviews the status of rectification actions on the findings or recommendations by
the internal auditors. Further details on the internal audit activities are provided the Shariah audit is carried out
department.
in BHB’s BAEC report.
The Shariah audit assesses matters
154 Internal audit is performed on all key divisions in the Group, and provides relating to Islamic business operations
the respective BAEC an independent assurance on the operational, financial, and activities, particularly on Shariah
compliance and risk related activities within the Group. The risk-based internal compliance related matters as well
audit plan is approved by the BAEC of the key operating subsidiaries on annual as zakat computation and payment
BIMB HOLDINGS BERHAD 199701008362 (423858-X) • Shariah Advisory and Shariah Audit and assurance to add value and
based on the Shariah Compliance
basis. All internal audit observations are highlighted in the internal audit reports
Policy. The principal objective is to
and reviewed by the BAEC.
provide an independent assessment
improve the degree of compliance
It is a fundamental requirement for an Islamic financial institution to have its
in relation to BHB’s Islamic business
entire business practices and operations based on Shariah rules and principles.
operations as well as ascertaining a
Islamic finance derives its value proposition from the application of Shariah
sound risk and internal control for
contracts in financial transactions that provide for different risks and return
Shariah Compliance.
profiles. Adherence to Shariah principles under such distinct contracts preserves
the validity and sanctity of any Islamic financial transactions. As such, BHB is
The same methodology used in
committed to upholding these principles by its strict observance of the Shariah
internal audit is used in carrying out
Governance Policy Documents outlined by BNM dated 20 September 2019.
the Shariah audit, which includes audit
planning, substantive procedures,
The Shariah advisory function of BHB and its subsidiaries (save for Takaful reporting and follow up on remedial
Malaysia and BIMB Securities) is carried out by the Shariah Supervisory Council actions.
(“SSC”) of Bank Islam. For Takaful Malaysia and BIMB Securities, the Shariah
advisory function is carried out by its own independent Shariah committee.