KUALA LUMPUR: The Securities Commission and Bursa Malaysia want a task force to draft a new guide for writing directors' statements which is in dire need of reforms.
Institute of Internal Auditors Malaysia (IIA Malaysia) president Hashim Mohammed suggested the IIA be the secretariat to facilitate the drafting of the statement until completion.
"The rest of the task-force members should include key professional bodies as well as accounting firms and senior management of various industries," he said on Friday, July 2 at the Corporate Governance (CG) Week 2010.
The guide will be part of the rules under the new corporate governance blueprint announced by the SC on Monday.
"The directors' statement should not merely be a cut-and-paste job, but one that provides holistic assurance which involves an objective examination of evidence to provide independent assessment on governance systems, risk management and internal control," said Hashim.
IIA Malaysia vice president, Josephine Low Suet Moi said while the directors' statement may be under the responsibility of the board and senior management, "external auditors also have a role to play."
Hashim said four important changes should be implemented in internal audit functions. They are:
One is that all activities and audit engagements should be based on risk priorities. Secondly, internal auditors should coordinate all sources of assurance, including liaisons with external auditors at least once annually. Thirdly, internal auditors should implement two written assessments each year: one on the effectiveness of internal control systems and another on the effectiveness of the board. Finally, the chief audit executive should have a standing invitation to executive committee meetings."
Directors are expected to facilitate this move towards better corporate governance by becoming more business-savvy and risk-literate.
"They must ensure that the management performs an adequate level of due diligence pertaining to the decisions that they take in addressing exposure to risks," he said.
Institute of Internal Auditors Malaysia (IIA Malaysia) president Hashim Mohammed suggested the IIA be the secretariat to facilitate the drafting of the statement until completion.
"The rest of the task-force members should include key professional bodies as well as accounting firms and senior management of various industries," he said on Friday, July 2 at the Corporate Governance (CG) Week 2010.
The guide will be part of the rules under the new corporate governance blueprint announced by the SC on Monday.
"The directors' statement should not merely be a cut-and-paste job, but one that provides holistic assurance which involves an objective examination of evidence to provide independent assessment on governance systems, risk management and internal control," said Hashim.
IIA Malaysia vice president, Josephine Low Suet Moi said while the directors' statement may be under the responsibility of the board and senior management, "external auditors also have a role to play."
Hashim said four important changes should be implemented in internal audit functions. They are:
One is that all activities and audit engagements should be based on risk priorities. Secondly, internal auditors should coordinate all sources of assurance, including liaisons with external auditors at least once annually. Thirdly, internal auditors should implement two written assessments each year: one on the effectiveness of internal control systems and another on the effectiveness of the board. Finally, the chief audit executive should have a standing invitation to executive committee meetings."
Directors are expected to facilitate this move towards better corporate governance by becoming more business-savvy and risk-literate.
"They must ensure that the management performs an adequate level of due diligence pertaining to the decisions that they take in addressing exposure to risks," he said.
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