Pt't.,,r.lf,,t:E.l.l:,..r.R.,r.l.l:l r.ll:l... .:t'.

lnternal Auditing and Corporate

Governance

After going throug! this chapter you should be able to:

. Define corporate governance.

. Understand the Malaysian Code of Corporate Governance.
. Understand the role of internal auditing in risk management.

lntroduction
The Malaysian Code on Corporate Governance (Code), first issued in March 2000,
marked a significant milestone in corporate governance reform in Malaysia. The
Code was later revised in2007 (2007 Code) to strengthen the roles and responsibili-
ties of the board of directors, the audit committee and the internal audit function.
The Securities commission Malaysia (SC), in luly 2011, released the corporate
Governance Blueprint 2011 (Blueprint) that provides the action plan to raise the
standards of corporate governance in Malaysia by strengthening self- and market
discipline and promoting greater internaiisation of the culture of good governance.
It seeks to upgrade the corporate governance culture from mere compliance with
rules to one that is more appropriate to capture the essence ofgood corPorate gover-
nance by deepening the relationship between companies and stakeholders.
The Malaysian Code on Corporate Governance 2012 (MCCG 2012) focuses on
strengthening board structure and composition, recognizing the role of directors
as active and responsible fiduciaries. They have a duty to be effective stewards and
guardians of their company, not just in setting strategic direction and overseeing the
conduct of business but also in ensuring that the company conducts itself in compli-
ance with laws and ethical values and maintains an effective governance structure to
ensure the appropriate management of risks and level of internal controls. Boards
and managements must be mindful of their duty to direct their efforts and resources
in the best interest of the company and their shareholders while ensuring that the
interests of other stakeholders are not compromised. Disclosure and transparency
are essential for informed decision-making. The timely availability of quality and
accurate information, including the reporting of financial performance, is a key facet
of investor protection and market confidence. I

28
 Chapter 3 lnternal Auditing and Corporate Governance

Definition of Corporate Governance

Corporate governance is defined as:

The process and structure used to direct and manage the business and affairs of the
comPany towards enhancing business prosperity and corporate accountability with
the ultimate objective of realising long-term shareholder value, whilst taking into
account the interests of other stakeholders.

From the definition, corporate governance focuses mainly on the processes used to
direct and manage the business and affairs of the company with the objectives of
striking a balance:
. The attainment of the companyt objectives.

' The alignment of corporate behaviour to meet the expectations of shareholders.

. Accountability and good stewardship, taking into consideration the interests of
shareholders, stakeholders, corporate participants and society at large.

Thus, corporate governance can be described as the proper procedure on how the
government of a company (the managers and the board of directors) should be
responsible to their voters (the shareholders, creditors and investors).
Corporate governance emphasises the transparency of the decision-making process,
fairness and trustworthiness in managing a company. An ef[ective internal audit func-
tion plays a key role in assisting the board to discharge its governance responsibilities.

Malaysian Code on Corporate Governance 2012

The MCCG 2012 specifically targets companies listed on Bursa Malaysia. All compa-
nies are, however, encouraged to adopt the principles and recommendations intro-
duced by the MCCG 2012 and make good corporate governance an integral part of
their business dealings and culture.
The recommendations are standards that companies are expected to adopt as
part of their governance structure and processes. Listed companies should .*plui.,
in their annual reports how they have complied with the recommendations. As
there is no 'one-size-fits-all'approach to corporate governance, companies are given
the flexibility to determine the best approach in adopting the principles within the
MCCG 2012. where there is a non-obseryance of a recommendation, companies
should give the reasons.
The MCCG 2012 became effective immediately after its announcement. The
first batch of companies that were required to report its extent of compliance with
the MCCG 2012werethose with financial year ending 3l December 2oL2.For exam-
ple, where a company's financial year ends on 3r December 2012, disclosure was
required in relation to the financialyear l lanuary-3L December 20L2 and,was made
in the annual report published in 2013. where a company's financial year began on
L laly 2012, disclosure was required in relation to the financ ial year t
Suiry zotz-l}
|une 2013 and should have been made in the annual report published in 2013. Listed
companies are, however, encouraged to make an early transition to the principles
and recommendations elaborated in the MCCG 2012.
The MCCG 2012 was revised after taking into account changing market
dlmamics, international developments and the need to continuously reialibrate and
enhance the effectiveness of the corporate governance framework. The MCCG 2012
is the first major deliverable of the corporate Governance Blueprint 201i (Blue-
print) launched by the sc in iuly 2011 and seeks to implement most of the recom-
mendations in the Blueprint.
30 Part One lntroduction to Internal Auditinq

The MCCG 2012 adopts a new structure that provides for greater clarity, more
information to companies and allows for simpler reading. Essentially, each principle
in MCCG 2012 is followed by recommendations and commentaries. The principles
encapsulate broad concepts underPinning good corporate governance that companies
should apply. The recommendations are specific standards that contribute towards
the principles. Listed companies are expected to adopt these standards as part of their
governance structure and processes. Each recommendation is followed by a commen-
tary that seeks to explain and assist companies in understanding the recommendation.
The MCCG 20l2has included some of the best practices from the 2007 Code.
The Malaysian Code on Corporate Governance 2012 sets out 8 broad principles
followed by 26 corresponding recommendations. Among others, the principles and
recommendations focus on:

i Laying a strong foundation for the board and its committees

roles effectively.
ii Promoting timely and balan
iii Safeguarding the integrity of financial reporting.
iv Emphasising the importance of risk management and internal
v Encouraging participation in general meeting.
.;:'j;::ff
15ffi,'.:"::i3;i:ff ifl'ffi 3."ffiT,lff :H;::ffi r,1iH1tHT
lowing pages sets out the principles and recommendations of the MCCG 2012 with
the corresponding Blueprint recommendations and relevant parts of the 2007 Code
to aid navigation and understanding of the MCCG 2012.

TABLE 3.1 | The MCCG 2012 with Recommendations from the Blueprint and the 2007 Code.

BLUEPRINT
PRI MCCG 2012 REC MCCG 20X 2 RECOMMENDATION
NO. PRINCIPLE NO. RECOMMENDATIOTI NO. 2007 coDE

Corporate Governance 24 lntr,-,du.t!o n

in Malaysia Mandate companies f dlti 4
to focus on substance
rather tian form in
meeiln,l Corporate qO\'
eina!'lc* reqriirements

1 Establish clear roles and ]] Il:e boaiii ilrr,r.. .' , ' Part 2: AA xvl
Res ponsibilities {leat tunr :,,,, r 'Relationship of the
boarrl a.,,: ti ,. board to management
Tnanaqe!, r!'l ':

1.2 The boar.d shouid -csiatr jish .iear l&ry&e*sqs

roles and ,f )pOnarl)',,ri.s '1r',
&$& i::
charge iis fidi;cran;;nt icadet
ship functions.
i€!
liidaii l]]:ti]liti.l,it.:4:j::ltlat

1.3 The board should formalise 10

ethical standards through a
code of conduct and ensure its
compliance.
Mandate boards to for-
mulate ethical standard
and system of compli-
ance through the com-
oanv's code of conduct
 Chapter 3 lnternal Auditing and Corporate Goyernance 3t

ore
BLUEPRINT
,pl.
MCCG 201 2 REC MCCG 20r2 NECOMMENDATION
>les PRINCIPLE NO. RECOMMENDATION NO, 2007 coDE
ries
'Ihe board should ensL;ra that
.rds
the company's straieg jFs pro fu4ar{laie bo.rrds tc ior
reir qote Sustainabiiitv. irLrlete !f rateeies that
en-
add re!,s !ustai,.rat-iiiity
LOn.
anC :takefrolder interests
thrc,i:gh internal policies
ples
t.5 The board sho : t. 1r 1!. ,i:itiv ri
and
cedures to allo
access to infor i.;l ', , .f,{;:
:i i:firrrlat,,i
heir
i..i- llll r \: i. 1 p,.. ri)

-.li ;r t.
.t t.t AA it inaj
^1:l
1r.6 The board should ensrrre ii is 30 Part ! :A lll'Supply of
:r;pported by a ruiraOl, .;,,.i, Enhance the role of com- information'
fied and compelent acrrnpar-ry pany s€cretaries by clari- Part2:AAXIX'Access
secreta ry. fying their role and by to information'
i trom
!ookirlg rnto qualification Part 2 . AA XX'Access to
he fol- re{:ltJiren'r€nts,ieecieC to r\c\ t(a
2 rrith !'ai:e ihe ek;!is and prc-
tessior':al standards for
Piirl 2 AA XXI :nd XXil
'Code
ccrnpanv seaaetaries cf
l;-.rtei ,;0nipanies

1.7 ; it: :.r!t:lrii :la: ,

t-r!-1 !,t i !!
Fvti::r,
f

,1 ( .l,i- 1' r! :

,gihen(ornpasition 2.1 fhe boarC shc,.;:.-l rs:at:rri',i :: a Partl:AlV

\lontinatitttl Carn r-rlilie-'; .i!'r :. " l,,i r, r. I r,t., a!,.].ti,r.: IC Part2:AAVlll'Appoint
:hr;u id ccilprr,r: i:{i: iLrir i€tr -r.. r.r llar,^dr ments to the board'
i:l iron erecutlr:..,liae( tir i Itilt - r)j:tr-i:.Ia. Wit!-!
n maJOrit'n of wt,ilrr r, i:ia f ru :..r,:.ir ..r-i irl( S,. :taifea!
I

: ncepe ncle ni, '1r, ;, j_. :irrrjr ai(:fiI

:tli' ,. t:,,

2.2 I i (, \r)i.-iir::111,.., larl 1 AA llt

= . rt \ ir . ) i-: i aj '-l a \r f, I ,r : ,r:i* 2 AA x

r.t, ritw ii.;: r i l; l

l
iarr;1 AA.x.ill
ii1atr i8!_l!ijl1ir. l
iir 'l.
lr rr.r.rr_.r- iraIrt Inq'
:zrd' aniliJal:'lrlr'':;r'-' : ' '

: -:al
I t,e L':,ord r! Dt t' i
'c Part 'i : B l'The level
md; LlnU Lr irl);).' , .. and make-up of
',..r' polir:; .r.: ,, Eemuneration'
alti,tct arl,j r.ri;iir' lirc, i.,i. Pari l:Bl!'Procedure'
Part i :B lll'Disclosure'
Part 2 :AA XXIV'Remu-
neration Committees'

ontinued)
 32 Part One Introduction to lnternalAuditing

BLUEPRINT
PRI MCCG 2012 REC MCCG 2012 RECOMMENDATION
NO. PBINCIPLE NO. RECOMMENDATION NO, 2007 coDE

Reinforceindependence 3.1 The board should undertake an 14

assessment of its independent Mandate boa:ds to
I

directors annually. undertake an assessment

on independence anttu-
ally, upon re-admission
and when any new
interests or relatlonships
surface based on a set
of criteri.a established by
the boards

2a The tenure of an !ndependent 13

director should not exceeC a Mandate a cumuiative
cumulative term o[ rriqp y'eJr i term iimit of up to nine
Upon completion of ihe nine years for an individual to
years, the independenl director serve as an independent
may continue to servP crl the director
board subject to the director's
re-designation as a non
independent director.

3.3 The bOard nl1jit ,:tr1., i,i:r .etrk

shareholderr .lpL r, '! ii "r I
event it na!, !eiai,,.r,i , :, ,,,).1
pendent dii'ei it:, .: ili li '1r i |;::
" ",
'
has se.v*d
nrOre than i,,..4 :: rr '

3.4 The positions of chairman and 15 Parr 2 AA ii'("hairm.n

CEO should be held by difterent i\4andate separating the and Chief Exer:utive
individuals, and the chati-man position of chairman anii Officer'
must be a non-executive mem- CEO and for tlie chairman
ber of the board. tc be a non-executive
member of the board

3.5 The boarri nii.tst .rrt,r i.F- l

majority of indef,c-,atr-''.;r'+'.
tor5 where lhe (':,tirr-,.:1, ,:1 ilr(
hroard is lrol ai'l 'i ralelP: li" l
director.

Foster commitment 4.1 The board should set cut expet )_1

tations on time cominitment for Mandate b'oards to sel

its members and proto<.ols for out therr expectations
accepting new clireciLr\llrP1. on trnle commitnlent
inclrrdinq protocols for
accepting other external
appointments in their
board charter

4.2 The boaro sh0uiai ef ,\i"'e .l .

memtrers nave .ir 1 r!\r ' , ri ii;r ,
priate contlntrlrrrl ed,r, ri ,.,
programmes

Uphold integrity in 5.1 The audit tommittee shor-1ld Part2:BBll

financial reporting ensure financial slatement!
comply with applicable financial
reporting standards
 Chapter 3 Internal Auditingand Corporate Goternance J-t

BLUEPR]NT
MCCG 201 2 REC MCCG 201 2 RECOMMENDATION
07 coDE PRINCIPLE NO. RECOMMENDATION NO. 2007 coDE

The audit (ommlitee sharjlC

have policies an,:i praaedures to
assessthe suitait,!ttly and rnrJe-
pendence of extenlai ardilors.

:rlze and manage 6.1 Ihe board should establish a Partl:Dll'lnternal

sound framework to manage control'
risks.
Part 2:BBVll &Vlll
6.2 The board shcLric establrsh ari
iniernaI audit fui,, itr;.,'a,hrl!-,
reports direct{,r, t. ih.. a1,Cir
ccmmittee.

. 'riely and high 7.1 The board should ensure the 21

:irsclosure company has appropriate cor- Move beyond minimum
porate disclosure policies and
reporting by making
procedures.
explicit the requirement
for sharehoiders to be
provided with quality
and timely information

7.2 The board ,chouL] eni.:riage the it5

company tc leverage -rr, infor- ir,.-!ri;Ie belter Llse ot
mation technoloqv for eiiective ieLilnoicgy tty aompa
dissc.linatron ul r)iorry rti()n ,:,p. irr i,)mrn,Jn jCate
wilh the!!' sharehoiders

- ftatrman
':::en reiationship 8.1 The board should take reason- 5 Part 3 : l'Shareholder
.:. utive -:a aompany and able steps to encouraqe share- voting'
Mandate companies to
- - :. Cers holder participation at general make public their com-
meetings.
mitment to respecting
shareholder rights and
take active steps to
inform shareholders of
how these rights can be
exercised
27
Fncourage companies
to provide better quality
and timely information
through notices and
documents and to serve
notices for meetings ear-
lier than the minimum
notice period

8.2 The board should en lu.. i;itii l

voting. rnrpos+ ilDliqali0n for
.hq .harrnan of the gen
jrai :reetjng tc inform
h r'-i ,q)11rP1! 9f thg,1
,.1ts,
'. J jmand d potl

(Continued)
 Part One Introduction to Internal At

BLUEPRINT
MCCG 201 2 REC MCCG 201 2 RECOMMENDATION
PRI
RECOMMENDATION r{0. 2007 coDE
NO. PRINCIPLE N().

i!:ll,r.:rr: , I

!;illl:il'ia' : '

Some of the key areas Lha engthened in the M(

Roles and Responsibilities of the Boord

The board is required to formali cal standards thro coo luct and
ensure comPanY strategies Prom stainabiliw. It is a pect malise a
board charter.

Composition of the Boord

:n-
The board should establish a no ng
se( rs.
dent director, who is resPonsible
ng
The nominating committee is c
policies formalising its approach

lndependence of lndependent Directors

The tenure ofindependent < lrs is capped to a cun ey( rrs.
Upon completion of the ni lrs, such directors ci rsr )n-
ide
independent directors; or in tional circumstances,
ren :ive
that an independent directo
rld eh lers
term ofnine years. The boar
in such exceptional circums
The calculation of the te
ted
as an independent director ,

ers' approval at the closest A

Shareholders' approval shor bU

limit. Rotation of indePend ec

able. Failure to seek shareh 1€

independent director Prior

annual report.

Seporotion of Chairman ond CEO

The positions ol cha rldbe held by
chairman must be a rber of the br
not an independent hould compri s(
directors.
 Chapter3 InternalAuditingandCorporateGovernaflce 35

The term chairman refers to the chairman of the board of directors while
the term CEO refers to the chief executive of the company; whatever the title is, the
(CDE chairman may or may not be a member of the board. The responsibilities of
the chairman should include leading the board in the oversight of management,
- : :,alue
'..'3nie5 while the CEO focuses on the day-to-daybusiness management of the company, and
this division should be clearly defined in the board charter. Listed companies that
-: rela- do not comply with any of the recommendations of the MCCG 2012, including the
::r1 separation of positions of chairman and CEO, must explain their circumstances and
-l reasons or justifications for doing so in their annual report.
-:

: :.1ue
- Commitment of directors
-raliies
The board is required to set out expectations on time commitment for its members
and protocols for accepting new directorships. Directors should notifr the chairman
before accepting any new directorship. Such notification should include an indica-
tion of time commitment expected of the new appointment. The nominating com-
mittee should take cognisance of such new appointment in its annual assessment of
e as follows:
directors.

Re mu ne rotion of directors
onduct and
The board should establish formal and transparent remuneration policies and pro-
tbrmalise a
cedures to attract and retain directors. A remuneration committee can perform this
function,

Risk manogementfrqmework ond internol controls system

r indepen-
The board is required to establish a sound framework to determine the company's
f directors.
level of risk tolerance and actively identifii, assess and monitor key business risks.
t including
lntegrity of finoncial reporting
The audit committee should ensure financial statements comply with applicable
financial reporting standards and assess the suitability and independence ofexternal
:mne years.
auditors. These recommendations are in addition to the requirements of an audit
Fd as non-
committee under the listing requirements.
may decide
cumulative
ilareholders
Relotionship between company ond shoreholders
l The board should encourage shareholder participation at general meetings and vot-
t appointed ing on resolutions by way of poll. The chairman should inform shareholders of their
. sharehold- rights to demand a poll vote at the commencement of a general meeting. The board
:term limit. is encouraged to put substantive resolutions to vote by poll and make an announce-
e-year term ment of the detailed results showing the number of votes cast for and against each
l not advis- resolution. Substantive resolutions are those that are not procedural and administra-
lure of any tive in nature; for example, the appointment of directors and auditors, approval for
ined in the issuance of shares, share buy-backs, related party transactions and resolutions that
are tabled by way of supplementary circular to shareholders.

ls and the
Role of Board of Directors in Corporate Governance
airman is The board of directors is appointed to act on behalf of the shareholders to run the
ependent day-to-day affairs of the business. The board is directly accountable to the share-
holders, and each year the company will hold an annual general meeting (AGM), at
36 Part One lntroduction to Internal Auditing

which the directors must provide a report to shareholders on the performance of the
company, state what its future plans and strategies are and also submit themselves
for re-election to the board.
The board of directors' key purpose is to ensure the company's prosperity by
collectively directing the company's affairs, whilst meeting the appropriate interests
of its shareholders and stakeholders. In addition to business and financial issues,
boards of directors must deal with challenges and issues relating to corporate gover-
nance, corporate social responsibility and corporate ethics.

Below ore the roles ployed by the boord in corporate governonce

. Assessing the scope and effectiveness of the systems established by management
to identify, assess, manage and monitor the various risks arising from the organi-
zation's acl"ivities.
. Ensuring senior management establishes and maintains adequate and effective
internal controls.
Satisfying itself that appropriate controls are in place for monitoring compliance
with laws, regulations, supervisory requirements and relevant internal policies.
Monitoring and reviewing the effectiveness of the internal audit function.
a Reviewing and assessing the internal audit plan and its progress.
Ensuring that the internal audit function is adequately resourced and enjoys
appropriate standing within the organization.
Considering management's response to major internal audit recommendations
and progress in their implementation.
Approving the appointment or dismissal of the head of internal audit.

Role of lnternal Audit in Corporate Governance

Recent events have highlighted the critical role of directors in promoting good cor-
porate governance. In particular, boards are charged with ultimate responsibility
for the effectiveness of their organizations' internal control systems. These events
have highlighted the key role that internal audit can play in supporting the board in
ensuring adequate oversight of internal controls and the effectiveness of corporate
governance.
The definition of internal auditing and International Standards identifieS that
internal audit has a role to play in evaluating and helping to improve governance
Processes.

The key role of an internal ouditis to ossist the board/oudit

committee in discharging its corporote governonce responsibilities
by delivering:
. An objective evaluation of the existing risk and internal control framework'
. Systematic analysis ofbusiness processes and associated controls.
. Reviews of the existence and value of assets.
. A source of information on major frauds and irregularities.
. Ad hoc reviews of other areas of concern, including unacceptable levels of risk.
. Reviews of the compliance framework and specific compliance issues'
. Reviews of operational and financial performance.
. Recommendations for more effective and efficient use of resources.
 Chapter 3 Internal Auditing and Corporate Goyernance 3?

nce of the . Assessments of the accomplishment of corporate goals and objectives.

hemselves . Feedback on adherence to the organizationt values and code of conduct/code of
ethics.
sperity by
e interests
ial issues, Role of an Audit Committee in Corporate Governance
ate gover- The responsibility of audit committees in the area of corporate governance is to pro-
rride assurance that the corporation is in reasonable compliance with pertinent laws
and regulations, is conducting its affairs ethically and is maintaining effective con-
nance trols against employee conflict of interest and fraud. The specific steps involved in
rnagement carrying out this responsibility include:
he organi- . Reviewing corporate policies relating to compliance with laws and regula-
tions, ethics, conflict of interest and the investigation of misconduct and fraud.
il
d effective . Reviewing current/pending litigation or regulatory proceedings bearing on
corporate governance in which the corporation is a party.
ompliance . Reviewing significant cases of employee conflict of interest, misconduct or
I policies. fraud.
ion. . Requiring the internal auditor to report in writing annually the scope of the
reyiews ofcorporate governance and any significant findings.
md enjoys

Risk Management
rendations
Risk management is an important part of planning for businesses. The process of
risk management is designed to reduce or eliminate the risk of certain kinds of
events happening or having an impact on the business.

Definition of risk management

good cor- Risk management is a process for identi$zing, assessing and prioritising risks of dif-
ponsibility ferent kinds. once the risks are identified, the risk manager will create a plan to
€se events minimise or eliminate the impact of negative events.
te board in
: corporate
Role of internol auditing in risk monogement
ntifies that Informally provides consulting and advice on risk management practices
pvernance Is the catalyst in forming risk management
Has active participation in implementing risk management
Participates as part of a formal risk management program
ft Provides independent assurance on risk management
sibilities Assists and advises a neq separate risk management function
Facilitates the identification and evaluation ofkey risks
lwork. Participates in the identification of emerging risks
Provides assurance through written reports on the management of key risks
Coaches management in responding to risks
a Provides assurance through written audit reports that risks are correctly identi
:ls of risk. fied and evaluated
Provides consulting reports to improve or implement the risk managemenl
process
Provides assurance through written audit reports over the risk management procesr
38 Part One Introduction to Internal Auditing

. Does consolidated reporting on risks

. Participates in setting the organizations risk appetite

' Develops the organizational poricies for its risk management

processes
. Implements risk responses on management,s behalf
. Makes decisions on risk responses

Apart from that, IA also enhances internal audit efforts

in the area of risk
management.

' Ensuring that the risk assessment identifies those risks

presenting the most sig_
nificant risks to shareholder value.
' Facilitating risk management discussions in the organization.
' viewing risk management as a core competency and ensuring
that auditors
receive appropriate training on risk and risk management
practices.
' Reviewing business plans to determine whether they
assess the risks embedded
in their strategies and have risk monitoring and trigger points.
' Reviewing the annual report to determine whether
risks are addressed
appropriately.

' Continuously monitoring and assessing stakeholder expectations

relative to risk
and risk management, as well as assisting in the educati,on
of these stakeholders.
' Building a stronger relationship with other risk and control
business functions
to drive an enhanced process to identifr emerging risks.
. Jdentitring and sharing best practices in risk management.

J.- sunnnnnny
This chapter col'crs the fl:arncr.r ork oi rhc \{alar-sian
Code on Corporate covernance,
20i2' This chapter firrtlrer explainr ih;' r'oie of internal
audit firnctlon in risk mailage-
rnent and io .ssist the board in <i,isr-hargi*g the corporate
go'ernance iu,ction.

corporate go\iernallce rentu;reratroncolnnrittee riskmanagement

nomir-iating cotnntittee independent dit.ectors committee
auclit r:cmrnittecr

l' l.ist trvo ilities of the boa.rl ,i dir-c. Iors rr-i.cc.rdance

i,r.ith the Ma1a1zslz6 gn4.
on Corfrorate Goverlrartr:l l0 L j i\,lL L{j, :012.}.
2. Deline corirorate go\.erltanrre.
3" t{c;t{ clocs an internal aucltt.issrst ihi:: iroarcli audit r:onrmittee
in discharging its
corporata qo\.erna1]ce respi:nslhrlitte"i
 (.[ LirLrr' 3 ll1tL,r]1o! Auiiti tg an i i..orpordtc Goyernonct

4. IcleniiS. whether the ibllolnng statements

are TRUE or FALSE.
a' 'rhe positions of cl-iarilnan ancl cEo should be held by the sanre inclir.iciur,l.
b' ]'he tenure of inciepenelent clirectors is capped
t. a cumulatir.e period rf
nine years.
c. The board shodd ibr"ur a remureratiolt conulittee
to establish forn_ral altl
transparent remuiteratton policies and procedures
to :rttract and retain
dircctors.
which the following are the roies of intern;rr auditing
"f in rrsk manageme't?
a. Participates as part of a ibrrnal risk management
prograt-n
ll. Revien's of operatronirj ar:ci flnancial pertbrrnance
c. Provides independent assLlrance on risk lltanagement
d. Assists and acl.,,ises a ile\,\,-, separate risk
managernenl f-unction

-liti>:c_

- - l(l fl:l Ahlau'at' SS" and Lru'e, D.J. (200'1) An Eraminirtion

of Internal Auclitor objectir.itr.: In
....'rc,itlel, House f)utsourcing, Audrtr*g; A r.ttrnar o"f practice
'ersus d* 7,heory,23, 147 15g.
- - :tctirrr, Alclbizer, G.R., casbelr, I.D. and r\lartin, I)
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