TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
27
INTERNAL CONTROL STATEMENT
INTERNAL AUDIT FUNCTION
The Group has in place an internal audit department, which provides the Board, through the Audit Committee, with independent
assurance on the adequacy and effectiveness of the Group’s system of internal control.
The internal audit function adopts an approach that focuses on major business units and functions in the Group for the
purpose of identifying areas to be audited by internal audit on a prioritized basis, vis-à-vis the business risks inherent in the
business units concerned. Group internal audit plan is tabled annually and approved by the Audit Committee. Action plans are
taken by Management to address the findings and concerns raised in the internal audit reports. The internal audit department
also follows up on the status of Management’s action plans on internal audit findings.
The costs incurred for the internal audit function in respect of the financial year ended 31 December 2014 amounted to
approximately RM2.37 million.
WEAKNESSES IN INTERNAL CONTROLS THAT RESULTED IN MATERIAL LOSSES
The Board is of the view that there were no material losses incurred by the Group during the financial year ended 31 December
2014 as a result of weaknesses in internal controls. The Group continues to take measures to strengthen the risk management
processes and internal control environment.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement pursuant to the scope set out in Recommended Practice Guide ("RPG")
5 (Revised), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control
included in the Annual Report issued by the Malaysian Institute of Accountants, for inclusion in the annual report for the year
ended 31 December 2014, and reported to the Board that nothing has come to their attention that cause them to believe that
the statement intended to be included in the annual report, in all material respects, has not been prepared in accordance with
the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for
Directors of Listed Issuers, or is factually inaccurate.
RPG 5 (Revised) does not require the external auditors to consider whether the Directors' Statement on Risk Management
and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group's risk
management and internal control system including the assessment and opinion by the Board of Directors and management
thereon. The external auditors are also not required to consider whether the processes described to deal with material internal
control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.
