CORPORATE GOVERNANCE STATEMENT
(CONT’D)
Principle 5: Uphold integrity in financial reporting (cont’d)
Suitability and independence of external auditors
The external auditors fulfill an essential role in giving assurance to the shareholders and other parties of the
reliability of the financial statements of the Company. The Company has always maintained a formal and
transparent relationship with the external auditors in ensuring the Company’s compliance with applicable
approved accounting standards and statutory requirements.
The role of the Audit Committee in relation to the external auditors is described in the Audit Committee’s terms
of reference as detailed on pages 25 to 29 of the Annual Report.
The Audit Committee is responsible for recommending the appointment or re-appointment of external auditors.
In assessing the suitability of external auditors, the Audit Committee will ensure that only firms which have
experience in the audit of listed companies and are registered with the Audit Oversight Board will be considered.
The Audit Committee recognizes that the regular provision of non-audit services by the external auditors may
lead to impairment of the external auditors’ independence and objectivity. The external auditors are therefore not
normally engaged for non-audit related services. However, the external auditors may be engaged for services
related to corporate exercises carried out by the Group from time to time, which are not regular in nature, for
which the engagement of the external auditors may be deemed to be more effective for the Group. The external
auditors have affirmed that members of their engagement team and the firm have complied with the relevant
ethical requirements regarding independence in the conduct of their audit engagement.
Principle 6: Recognise and manage risks
Framework to manage risks
The Board is responsible for establishing a sound framework to manage risks and maintaining a sound system
of internal controls to safeguard shareholders’ investment and the Company’s assets as required by the MCCG
2012. The Directors also have a general responsibility for taking reasonable steps to prevent and detect fraud
and other irregularities. The Statement on Risk Management and Internal Control set out on pages 22 to 24 of
this Annual Report, provides an overview of risk management and the state of internal control within the Group.
Internal audit function
The Board has outsourced its internal audit activities to a professional service firm to support the internal audit
function. The Audit Committee Report set out on pages 25 to 29 of this Annual Report provides a summary of
the internal audit function and the internal audit activities carried out during the financial year.
Principle 7: Ensure timely and high quality disclosure
Corporate disclosure policies and procedures
The Board abides with the corporate disclosure policies as set out in the Listing Requirements. It is the policy of
the Company that immediate disclosure is made of material information. Information is considered material if it
is reasonable to expect that it will have a material effect on the price, value or market activity of the Company’s
securities or it will affect the decision of an investor or holder of the Company’s securities in determining
his choice of action. The Board members will be kept informed of material matters which require disclosure
and appropriate announcement will be drafted by management. Announcements of material matters will be
circulated to the Board for buy-off before public release.
•
Pentamaster Corporation Berhad
(572307-U)
Annual Report 2014
19
