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AirAsia X Berhad • Annual Report 2014
SUMMARY OF TERMS OF REFERENCE OF THE AUDIT COMMITTEE (“AC”)
A. Composition
The AC shall comprise at least three (3) non-executive directors appointed by the
Board. All the AC members must be non-executive directors, with a majority of them
being independent directors. All AC members must have strong financial background
and at least one member shall:
(i)
be a member of the Malaysian Institute of Accountants; or
(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at
least 3 years of working experience and:-
• he must have passed the examinations specified in Part I of the First
Schedule of the Accountants Act 1967; or
• he must be a member of one of the associations of accountants specified in
Part II of the First Schedule of the Accountants Act 1967; or
(iii) adhere to other requirements as prescribed or approved by Bursa Malaysia.
B. Roles and responsibility
The primary roles and responsibilities of the AC with regards to the AirAsia X Internal
Audit function, risk management, external auditor, financial reporting, related party
transactions, annual reporting and investigation are as follows:
Internal Audit (“IA”)
• IA function is to report directly to the AC;
• Review the adequacy of the scope, functions, competency and resources of
the internal audit function, and that it has the necessary independence and
authority to carry out its work, which should be performed professionally and
with impartiality and proficiency;
• Review the internal audit programme and results of the internal audit process
and, where necessary, ensure that appropriate actions are taken on the
recommendations of the internal audit functions;
• Review any appraisal or assessment of the performance of members of the
internal audit function;
• Approve any appointment or termination of senior staff members of the internal
audit function; and
• Take cognisance of resignations of internal audit staff and provide the staff an
opportunity to submit reasons for resigning.
Risk Management
• Review the risk management framework of the Company to ensure the existence
of effective risk management policies and controls to monitor and manage all
financial and non-financial risks.
External Auditor
• Consider the appointment or re-appointment of the external auditor, the audit
fees, any questions of resignation or dismissal of the external auditor and to
recommend the nomination of the external auditor;
• Assess the suitability and independence of the external auditor;
AUDIT COMMITTEE REPORT
• Discussing with the external auditor before the audit commences, the nature and
scope of the audit, and ensure co-ordination where more than one audit firm is
involved;
• Provide a line of communication between the Board and the external auditor;
• Discuss problems and reservations arising from the interim and final audits,
and any matter the external auditor may wish to discuss (in the absence of
management where necessary) including the Audit Report and the level of
assistance given by the Company’s employees to the external auditor; and
• Review the external auditor’s management letter and management’s response in
evaluating the Company’s system of internal control.
Financial Reporting
Review the quarterly and year-end financial statements of the Company, focusing
particularly on:
• any change and appropriateness of accounting policies and practices;
• significant adjustments arising from the audit;
• litigation that could affect the results materially;
• significant and unusual events;
• the going concern assumption;
• compliance with approved accounting standards and other legal requirements;
and
• ensuring the timely release of such financial statements.
Related Party Transactions
• Consider and evaluate any related party transactions or conflict of interest
situations that may arise within the Company or affiliates including any
transaction, procedure or course of conduct that raises questions of management
integrity.
Investigation
• Consider the major findings of internal investigations; and management’s
response; and
• Review the Company’s procedures for detecting fraud and whistle blowing
and ensure that arrangements are in place by which staff may, in confidence,
raise concerns about possible improprieties in matters of financial reporting,
financial control or any other matters (in compliance with provisions made in the
Companies Act, 1965).
Other Matters
• Consider any other matters as directed by the Board.
