WONG ENGINEERING CORPORATION BERHAD (409959-W)
(Incorporated in Malaysia)
TERMS OF REFERENCE OF THE AUDIT COMMITTEE
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling the following oversight objectives on the Group activities.
- Assess the Group’s process relating to its risks and control environment;
- Oversee financial reporting; and
- Evaluate the internal and external audit process.
The Board shall elect and appoint Committee members from amongst their numbers, comprising not fewer than three (3) Directors. All members of the Audit Committee shall be Non-Executive Directors of the Company and financial literate.The Board shall at all times ensure that at least one (1) member of the Committee fulfils the Bursa Securities requirements as prescribed in paragraph 15.09 (1C):
- Must be a member of the Malaysian Institute of Accountants (“MIA”); or
- If he or she is not a member of MIA, he or she must have at least three (3) years of working experience and :-
- He or she must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or
- He or she must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountant Act 1967; or
- Fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).
If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced below there (3), the Board shall within three (3) months of the event appoint such number of new members as may require
to fill the vacancy.
The Chairman of the Committee shall be an Independent & Non-Executive Directors. No alternate Director of the Board shall be appointed as a member of the Committee.
The Board shall review the terms of each of its members at least once (1) every three (3) years.
- Duties and Responsibilities
In fulfilling its primary objectives, the Committee shall undertake the following duties and responsibilities:
- Review with the external auditor, the audit scope and plan, including any changes to the planned scope of the audit plan.
- Review the adequacy of the internal audit scope and plan, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work.
- Review the external and internal audit reports to ensure that appropriate and prompt remedial action is taken by management on major deficiencies in controls or procedures that are identified.
- Review major audit findings and the management’s response during the year with management, external auditors and internal auditors, including the status of previous audit recommendations.
- Review the assistance given by the Group’s office to the auditors, and any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information.
- Review the independence and objectivity of the external auditors and their services, including non-audit services and the professional fees, so as to ensure a proper balance between objectivity and value for money.
- Review the appointment and performance of external auditors, the audit fee and any question on resignation or dismissal before making recommendations to the Board.
- Review the budget and staffing of the internal audit department.
- Review the adequacy and integrity of internal control systems, including enterprise risk management, management information system, and the internal auditors’ and/ or external auditors’ evaluation of the said systems.
- Direct and where appropriate supervise any special projects or investigation considered necessary, and review investigation reports on any major defalcations, frauds and thefts.
- Review the quarterly results and the year-end financial statements, prior to the approval by the Board focusing particularly on:
- Changes in or implementation of major accounting policy changes;
- Significant or unusual events;
- The going concern assumption; and
- Compliance with accounting standards and other legal requirements.
- Review procedures in place to ensure that the Group is in compliance with the Companies Act 1965, Listing Requirements of Bursa Securities and other legislative and reporting requirements.
- Review any related party transaction and conflict of interest situation that may arise within the work performed in fulfilling the Committee’s primary responsibilities.
- To do the following, in relation to the internal audit function:
- Review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work;
- Review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;
- Review any appraisal or assessment
- Any other activities, as authorized by the Board.
In carrying out its duties and responsibilities, the Committee shall have the following rights:
- Explicit authority to investigate any matter within its terms of reference;
- Adequate resources which are required to perform its duties;
- Full and unrestricted access to any information pertaining to the Company and of any other companies within the Group;
- Direct communication channels with external and internal auditors;
- Obtain external independent professional advice and to invite external parties with relevant experience to attend the Committee meetings for advice;
- Discretion to invite other Directors and/ or employees of the Company to attend any particular Committee meeting to discuss specific issues; and
- Convene meetings with external and internal auditors, excluding the attendance of the other Directors and employees of the Company whenever deemed necessary.
- Quorum and Committee’s procedures
The Committee shall meet not less than four (4) times per financial year and as many times as the Committee deemed necessary. The external auditors may request a meeting if considered necessary.The quorum for meetings of the Committee shall be two members who are Independent and Non-Executive Directors.The Committee may require a representative of the external auditors to attend any of its meetings as it determines.The Executive Secretary of the Company shall be the secretary of the Committee. The secretary shall ensure that reasonable notices of meetings be given to members of the Committee and shall circulate the minutes of meetings of the Committee to all members
of the Board.The Committee may, as and when deemed necessary, invite other Board members and senior management members to attend the meetings.The Chairman shall submit an annual report to the Board summarizing the Committee’s activities during the year and the related significant results and findings.The Committee shall meet at least annually with the management and, at least once every year with the Head of Internal Audit and External Auditors in separate sessions to discuss any matters with the Committee without the presence of any executive member
of the Board. The Committee shall regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter.