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Related Party Transactions
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Reviewed related party transactions and conflict of interest situations to ensure that such transactions are at arm’s length and are in the
best interest of the Group and AAB and, where appropriate, recommend to the Board for approval.
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Reviewed the process used to procure shareholders’ mandate for recurrent related party transactions.
Investigations
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Considered major findings of internal investigations and Management’s response.
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Reviewed AAB’s procedures for detecting fraud and whistleblowing.
Internal Control
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By way of discussions with key Senior Management and through the review of process undertaken by the GIAD and the External Auditors,
evaluated the overall adequacy and effectiveness of:
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the system of internal controls, including controls within information technology;
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the Group’s finance, accounting and audit organisations and personnel; and
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the Group’s policies and compliance procedures with respect to business practices.
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Reviewed the employee code of business practice, vendor code of business practice, the whistleblowing policy and the outcome of any
cases investigated.
Annual Review of the Terms of Reference of the Audit Committee
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Reviewed the terms of reference of the AC, and where necessary, obtained the assistance of the Group’s External Auditors and external
legal counsel, and recommended changes to the Board for approval.
Moving forward, the AC of AAGB will continue to discharge these roles and responsibilities.
INTERNAL AUDIT FUNCTION
The Group has a well-established in-house GIAD to assist the AC in carrying out its functions. The GIAD maintains its independence through
reporting directly to the AC. The GIAD plans and provides supervision on internal audit services across all subsidiaries and associated companies
in the Group, including the various Airline Operating Companies (“AOCs”). The internal audit teams in the respective AOCs have a reporting
line to the Group Head, GIAD. The GIAD reviews and compiles their reports in the form of a Group Internal Audit Report to be submitted and
presented to the AC for its review and deliberation.
The GIAD is guided by its Internal Audit Charter that provides independence and reflects the roles, responsibilities, accountability and scope of
work of the department and aligned with the International Professional Practice Framework (“IPPF”) on Internal Auditing issued by the Institute
of Internal Auditors. The Group Head, GIAD reports functionally to the AC and administratively to the Group Chief Executive Officer (“GCEO”).
The principal responsibility of the GIAD is to undertake regular and systematic reviews of the systems of internal controls so as to provide
reasonable assurance that the systems continue to operate efficiently and effectively. The GIAD adopts a risk-based audit methodology with
reference to the five elements of the Committee of Sponsoring Organisations of the Treadway Commission (“COSO”) i.e. control environment,
risk assessment, control activity, information and communication as well as monitoring, to develop its audit plans by determining the priorities
of the internal audit activities, consistent with the strategies of the Group. Based on risk assessments performed, greater focus and appropriate
review intervals are set for higher risk activities, and material internal controls, including compliance with AAB’s policies, procedures and
regulatory responsibilities.
The audits cover the review of the adequacy of risk management, the strength and effectiveness of the internal controls, compliance to both
internal and statutory requirements, governance and management efficiency, among others. The audit reports, which provide the results of
audits conducted, are submitted to the AC for review. Key control issues and recommendations are highlighted to enable the AC to execute its
oversight function. Areas for improvement and audit recommendations are also forwarded to the Management for their attention and further
action. The Management is responsible for the implementation of corrective actions within the required time frame.
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AirAsia Group Berhad
REPORTS AND FINANCIAL STATEMENTS
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