The guidelines are seen as a breakthrough as they provide for the first time in Malaysia a set of definitive guidelines on how to benchmark the internal audit function against internationally-accepted best practices and standards of internal auditing. They also provide guidance on how the audit committee can assess the effectiveness of their internal audit functions.

"The introduction of these guidelines is certainly a milestone in our efforts to enhance corporate governance standards in Malaysia," said the SC Chairman, Datuk Ali Abdul Kadir.

The Guidelines on Internal Audit Function will help boards of directors of public listed companies to meet the best practices relating to the internal audit function in the Malaysian Code on Corporate Governance.

"By providing the boards of public listed companies with the necessary assistance in discharging their responsibilities effectively in respect of the internal audit function, the guidelines will contribute towards higher standards of governance in the country," said Datuk Ali.

Boards of public listed companies are required under the KLSE Listing Requirements to disclose the extent of their compliance with the Malaysian Code on Corporate Governance in their annual reports, which would include matters pertaining to the internal audit function.

As a further measure, the KLSE is considering the guidelines for purposes of giving effect to it, in its Listing Requirements.

IIA Malaysia was the Secretariat to the Taskforce on the Guidelines of Internal Audit Function which was established in 2001. The SC, in advocating an industry-driven initiative, had given the taskforce a grant of RM50,000 to formulate the guidelines. The taskforce was chaired by Dr. Abdul Samad Alias, President of the Malaysian Institute of Accountants (MIA) and the Malaysian Institute of Certified Public Accountants (MICPA).

"I am very pleased with the work of the taskforce and IIA Malaysia. The commitment that they have shown in the course of developing the guidelines is certainly commendable," said Datuk Ali.

To ensure that the guidelines were holistic, the taskforce comprised not only internal audit practitioners and the Auditor-General of Malaysia but also representatives from the Accountant General's Department, the Federation of Public Listed Companies, as well as academicians. The SC and KLSE also participated in the taskforce as observers.

The Guidelines are available at the IIA Malaysia headquarters at RM25 per copy.

Enquiries on the Guidelines may be addressed to:

The Institute of Internal Auditors Malaysia
160-3-3, Kompleks Maluri
Jalan Jejaka
Taman Maluri
55100 Kuala Lumpur

E-mail: [email protected]
Tel no: 03-9282 1148
Fax no: 03-9282 1241

The SC's Securities Industry Development Centre (SIDC) and IIA Malaysia will be holding seminars to create awareness on the guidelines among directors of public listed companies.