Page 84 - EXIM_AR2021

82 ENHANCING EXIM BANK MALAYSIA
GOVERNANCE

STATEMENT ON
INTERNAL CONTROL

INTERNAL CONTROL

Internal Control is defined as a process, performed by EXIM’s Board of Directors, management and personnel, designed to provide
reasonable assurance of the achievement of the following objectives:

• The reliability and integrity of information
• Compliance with policies, plans, procedures, laws and regulations and contracts

• The safeguarding of assets
• The economical and efficient use of resources
• The accomplishment of established objectives and goals for operations or plans

The Board recognises the importance of maintaining a sound system of internal control and risk management practices,
as well as good corporate governance. The Board exercises overall responsibility in identifying, evaluating and reviewing the
adequacy and effectiveness of the Bank’s risk management, governance and internal control. The Board recognises that
risks cannot be eliminated completely and as such, systems and processes have been put in place to provide reasonable and
not absolute, assurance against material misstatement of financial information or against material misstatement of financial
information or against losses and fraud. The Board is of the view that the internal control framework instituted throughout
EXIM Bank is sufficient to safeguard stakeholder’s investments, customer’s interests and EXIM Bank’s assets. Reviews are
continuously carried out by the Bank to ensure effectiveness of the system.

BOARD AUDIT COMMITTEE

The Board Audit Committee (BAC) was established to further strengthen EXIM Bank’s internal audit processes, and therefore,
meets regularly with the objective of assisting the Board in managing Bank’s range of inter-related risks in an integrated manner.
The key responsibilities that the BAC execute as established by the Board to ensure the integrity of the systems of the internal
controls are as follows:
a) Reviews the adequacy and integrity of EXIM Bank’s internal control systems and management information system,
including systems for compliance with applicable laws, regulations, rules, directives and guidelines, as identified by the
internal auditors, the external auditor and regulatory authorities.

b) Reviews the adequacy and comprehensiveness of the internal audit process, scope of audit, competency of the auditors
and the independence of the Internal Audit function. The Audit & Assurance Department (AAD) reports to the BAC,
performs regular reviews of the processes to assess their effectiveness and highlights any significant risks affecting EXIM Bank.
The BAC reviews the internal auditor’s auditable areas and resources annually, via the Annual Audit Plan; and

c) Regularly reviews and holds discussions with the Management on actions taken to address lapses in internal control and
issues identified in reports prepared by the internal auditors, external auditors and regulatory authorities.

d) Reviews all related party transactions, and audit and non-audit related fees proposed by the Bank’s external auditors.
e) Reviews the financial statements of the Bank (half-yearly and annually), preliminary results release and any other
formal release relating to its financial performance prior to escalation to the Board for approval to ensure accuracy and
appropriateness of the financial reporting.