Bursa Malaysia Annual Report 2015

GOVERNANCE

Bursa Malaysia •

Annual Report 2015

p. The AC reviewed the Statement on Internal Control and Risk

Management on 17 November 2015 and 28 January 2016, for

publication in the 2015 Annual Report.

q. On 28 January 2016, GIA confirmed its organisational

independence to the AC, where the Head of GIA and all the

internal auditors had signed the annual declaration that they

were and had been independent, objective and in compliance

with the Code of Ethics of Bursa Malaysia and the IIA Inc. in

carrying out their duties for the FY 2015.

INTERNAL AUDIT FUNCTION

GIA’s vision is to become a provider of leading internal audit,riskmanagement

and governance services as well as to be a strategic business partner to the

organisation. Its mission is to enhance and protect the organisational value

of Bursa Malaysia Group by providing risk-based and objective assurance,

advice and insight. By creating value through its services, GIA can become

a partner to business and actively facilitate transformational change.

The IA functions include providing the Board, through the AC, reasonable

assurance of the effectiveness of the Group’s risk management, control

and governance processes. GIA, which reported functionally to the AC

and administratively to the CEO during the FY 2015, was led by the Head

of GIA. To ensure that the responsibilities of GIA are fully discharged, the

AC reviews the adequacy of the scope, functions and resources of the IA

function as well as the competency of the Internal Auditors.

The IA activities were carried out based on a risk-based audit plan approved

by the AC.The audit plan took into consideration the Corporate and Divisional

Risk Profiles and input from the senior management and the AC members.

Further, GIA also engaged some of the Heads of the Strategic Business Units/

Support Functional Units in the development of the 2015 risk-based audit

plan. The results of the audits in the IA reports were reviewed by the AC. The

relevant Management members were made responsible for ensuring that

corrective actions on reported weaknesses were taken within the required

timeframes. GIA conducted follow-up audits on key engagements to ensure

that the corrective actions were implemented appropriately. In this respect,

the IA has added value by enhancing the governance, risk management and

control processes within the Group.

The GIA also leverages on reports received annually from the Chicago

Mercantile Exchange Group’s (“CME”) Independent Service Auditor’s Report

(issued by RSM US LLP) – Service Organisation Control 1, on Controls

Placed in Operation and Tests of Operating Effectiveness relevant to the

CME Globex Trading, CME Clearport and CME Clearing Services. These

reports are received annually due to the listing of all of Bursa Malaysia

Derivatives’ (“BMD”) products on CME’s Globex Trading Platform. The

CME’s independent service auditors examine and express their opinion on

CME’s description of its trade matching and clearing services system for

processing transactions for user entities and the suitability of the design

and operating effectiveness of controls in achieving the related control

objectives. GIA communicates with CME’s independent service auditor for

further information if necessary.

The total costs incurred by GIA in discharging its functions and responsibilities

in 2015 amounted to RM3,778,102 compared to RM2,798,842 in 2014.

AUDIT COMMITTEE

REPORT