Bursa Malaysia Annual Report 2015

GOVERNANCE

Bursa Malaysia •

Annual Report 2015

e. The AC had two private meetings with the External Auditors

in 2015 without the presence of the CEO, Management and

Internal Auditors. At the first private meeting held in January

2015, the AC enquired about Management’s cooperation with the

External Auditors, their sharing of information and the proficiency

and adequacy of resources in financial reporting functions,

particularly in relation to the compliance with applicable MFRSs.

There were no areas of concern raised by EY that needed to

be escalated to the Board. A couple of issues were raised by

EY at the second private meeting held in October 2015. The

AC Chairman immediately informed the Management of these

pertinent issues for their further consideration and action. The AC

Chairman also invited the External Auditors to contact him at any

time should they be aware of incidents or matters in the course

of their audits or reviews that needed his attention or that of the

AC or Board.

f. On 20 October 2015, the AC reviewed the External Auditors’

2015 Audit Plan outlining their scope of work and proposed fees

for the statutory audit, together with assurance-related fees for

limited review of quarterly condensed consolidated financial

statements, and review of the Statement of Internal Control and

Risk Management. The AC recommended the proposed audit

fees for the Board’s approval and the same was duly approved

by the Board on 23 October 2015.

The Board at its meeting held on 23 October 2015 then requested

the Management to issue a Request for Proposal (“RFP”) to

facilitate an independent review by the AC of the external audit

scope and fees. Submissions of proposals in response to the RFP

were made by the participants in November 2015. Evaluations

of the proposals took place in December 2015 based on the

technical and financial evaluations criteria set by the Minor

Tender Committee (“MTC”), to ensure that quality services are

provided at competitive pricing.

g. The AC had on 14 January 2016 deliberated the outcome of the

evaluations as presented by the MTC, which included an

assessment of the engagement teams’ qualifications, credentials

and experience, particularly in the financial services sector, the

firms’ competitive advantage with global network resources,

their audit work approach, and their ability to provide value added

advice and services, as well as to perform the work within Bursa

Malaysia’s timeline. The AC then recommended to the Board for

approval of the appointment of EY as external auditors of Bursa

Malaysia for the FY ending 31 December 2016.

h. On 28 January 2016, the AC further undertook an annual

assessment of the quality of audit which encompassed the

performance of EY, the quality of EY’s communications with the

AC and Bursa Malaysia Group, and EY’s independence, objectivity

and professionalism.

Assessment questionnaires were used as a tool to obtain input

from Bursa Malaysia personnel who had substantial contact

with the external audit team and EY throughout the year. EY’s

performance was rated using a five-point scale on their ability

to provide advice, suggestions or clarifications relating to the

presentation of financial statements, ability to provide realistic

analysis of issues using technical knowledge and independent

judgment, and maintain active engagement, through both verbal

and written communication during the audit process, including

their responsiveness to issues.

With regard to the observations by Bursa Malaysia’s personnel

on the external audit team, the AC also took into account

the assessment of the lead audit engagement partner and

engagement team’s performance based on the two private

meetings held between the AC and the external auditors in

October 2015 and January 2016 respectively.

The AC was satisfied with the suitability of EY based on the

quality of services and sufficiency of resources they provided to

the Group, in terms of the firm and the professional staff assigned

to the audit. The AC took note of the openness in communication

and interaction with the lead audit engagement partner and

engagement team, which demonstrated their independence,

objectivity and professionalism.

The above outcome of the performance assessment of EY for

2015 supports the AC’s recommendation to the Board for

approval of the appointment of EY as External Auditors for the FY

ending 31 December 2016.

The Board at its meeting held on 2 February 2016 approved the

AC’s recommendation to appoint EY, subject to the shareholders’

approval to be sought at the forthcoming 39

AGM on the

appointment of EY as external auditors of the Company for the FY

ending 31 December 2016.

AUDIT COMMITTEE

REPORT