CORPORATE

Internal Audit Unit

Nama: Mohamad Rizal bin Mohd Hidzir
 
E-mel: rizal[at]kejora[dot]gov[dot]my
 
No. Telefon: 07-8843161
OBJECTIVE

Assist management and the Board in carrying out its responsibilities effectively. The Internal Auditors are required to provide independent and objective assurance and consulting services aimed at adding value and improving the operations of an organization. It helps an organization achieve the objectives of a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

The Internal Audit Unit (UAD) is an independent function that provides assurance and consulting services objectively to add value and enhance the level of operations of the organization.

Since the establishment of KEJORA, the Audit function is carried out by the Auditors alone without the formal establishment of the Internal Audit Unit. Subsequently, the Government had issued the Treasury Circular No. 2 of 1979 and General Circular Letter No. 3 of 1998 which stipulates that each Ministry and Agency shall establish its own UAD. In line with this authority, the UAD of South East Johor Development Authority (KEJORA) was officially established in 2001.

Furthermore, various current developments and important roles of UAD have taken place throughout the period of its establishment. Accordingly, the Ministry of Finance had issued the Treasury Circular No. 9 of 2004 which came into force on 12 October 2004. This circular aims to provide an explanation of the role and responsibilities of the UAD.

This Treasury Circular is also in line with the Regional Development Authority Financial and Accounting Directive (AKP LKW) 2006 and AKP LKW 2010 (Chapter 12 Internal Audit) issued by the Ministry of Rural and Regional Development (KKLW). This directive is effective as of 1 January 2010.

The Head of the Internal Audit Unit shall be functionally accountable to the Audit Committee and administratively to the General Manager to ensure the effectiveness of the Internal Audit Unit.

The scope of UAD covers the review and evaluation of the activities and operations of interested organizations and subsidiaries. The tasks of UAD are as follows:

  1. Assess the reliability and effectiveness of the organization’s financial system and internal controls;
  2. Assess the level of compliance with all policies, laws, regulations and directives in force;
  3. Review the activities of the organization to ensure that they are managed prudently, efficiently and effectively;
  4. Review the assets and interests of the organization are protected in terms of loss, fraud and misappropriation;
  5. Provide advice/ views on internal controls on all systems including information technology systems;
  6. Review the risk assessment process in the organization if management has been established.

UAD is responsible for conducting financial management audits and performance audits. A financial management audit includes an examination of the financial system, internal controls and financial records to determine whether expenditure, revenue, assets and stores have been managed in accordance with relevant laws, regulations and directives. While performance auditing includes an evaluation of the activities of an organization to determine its goals have been achieved and resources are used prudently, efficiently and effectively. The UAD audit covers all Divisions / Units in KEJORA.

  1. Prepare the Annual Plan of UAD
  2. Perform the Auditing Process
  3. Managing the KEJORA Audit Committee Meetings
  4. Prepare the Annual Report

AKP LKW 2010 para 12.7 states the authority given to UAD as follows: –

  1. May enquire anyone to provide any explanation or information required while carrying out audit and investigation duties;
  2. Can search and/ or obtain books/ documents/ records or extracts from books/ documents/ records in the audit office;
  3. Right to inspect all records, books, files, minutes, accounting documents, cash, stamps, securities, stores or other property subject to auditing;
  4. May refer to an officer of the Board or a public officer regarding the matter being audited;
  5. Can conduct audits either by notification or by spot-checks from time to time.

The establishment of the Audit Committee in accordance with the Financial and Accounting Directive of the Regional Development Authority 2010 (AKP LKW 2010) states as follows:

  1. The Audit Committee shall be established through a resolution by the Board of Directors outlining its terms of reference.
  2. The Audit Committee shall consist of 3 to 5 non-executive Board Members including the Chairman. The Chairman of the Audit Committee may be appointed by its own members or the Board.
  3. The mandatory quorum of the meeting is 3 ⁄ 4 of its members. For a total of three (3) members, the quorum for the meeting is at least two (2) members while the membership of five (5) people is three (3) members.
  4. The Committee meets at least once in a period of three (3) months or as determined by its Chairman.

The main functions of the Audit Committee are:

  1. Review the requirements of the UAD including its charter.
  2. Assess the effectiveness and capability of the internal control system
  3. Review the planning of audit activities by the Internal Auditors which covers the scope of work, schedule, membership and coordination between the Auditors and the Internal Auditors of the Ministry.
  4. Review the reports from the Internal Auditors and the Auditors as well as certify the necessary follow-up actions to the Board.
  5. Review and advise the Board in relation to the Financial Statements, prospectuses and other financial reports issued.
  6. Review and advise the Board in relation to quantitative performance information on activities subject to audit and other matters involving responsibilities as determined by the Board.
  7. Track compliance with rules set by the Board.
  8. To ensure that the Board constantly updates the implementation of work in line with professional changes that occur in the field of accounting as declared by the Malaysian Accounting Standards Board (MASB).
  9. Perform functions set by the Board from time to time.
  10. Report to management on officers found to be committing misappropriation for suitable action to be taken.