Policies & Code


Policies & Code

External Auditors Policy


Audit Committee (“Committee”) of Eco World International Berhad (“Company”) is responsible for making recommendations to the Board of Directors (“Board”) with regards the appointment and removal of the external auditors. In making those recommendations, the Committee is authorised to conduct periodic reviews of the external auditors.

The objective of this External Auditors Policy (“Policy”) is to outline the guidelines and procedures for the Committee to assess the suitability, objectivity and independence of the external auditors to safeguard the quality and reliability of the audited financial statements.



The Board has delegated to the Committee the responsibility to review the appointment, resignation, remuneration and removal of external auditors and recommend to the Board for decision making.

Pursuant to Section 271 of the Companies Act 2016, the Company shall at each annual general meeting appoint or re-appoint the external auditors of the Company, and the external auditors so appointed shall, hold office until the conclusion of the next annual general meeting of the Company.

The appointment, resignation and removal of external auditors are subject to the provisions of the Companies Act 2016 and Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

Should there be a need to fill a casual vacancy or change of external auditors, the Committee will follow the following procedures for selection and appointment of new external auditors:

a. the Committee to identify the audit firms who meet the criteria for appointment and to request for their proposals of engagement for consideration;
b. the Committee will assess the proposals received and shortlist the suitable audit firms;
c. the Committee will meet and/or interview the shortlisted candidates;
d. the Committee may delegate or seek the assistance of the Chief Financial Officer (“CFO”) to perform items (a) to (c) above;
e. the Committee will recommend the appropriate audit firm for the Board’s approval; and
f. the Board will endorse the recommendation and seek shareholders’ approval for the appointment of the new external auditors and/or resignation/removal of the existing external auditors at the general meeting.



The external auditors are precluded from providing any services that may impair their independence or conflict with its role as external auditors. The external auditors will need to satisfy the Committee that:

a. no services will be provided that will result in a conflict of interest;
b. any services provided additional to that of the audit function involving non-audit services, would not have a material bearing on the audit and would not involve the firm auditing their own work;
c. the audit firm has an audit personnel rotation policy, including lead engagement partner, signing partner, key audit partner and engagement quality control reviewer, requiring rotation at least every seven (7) years; and
d. there will be no situations where the auditors assume the role of management or where the auditors are placed in the role of advocate for the Company, subsidiaries and joint ventures.

In avoidance of doubt, the Committee shall obtain a written declaration on annual basis from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.



In order to ensure that the external auditors maintain their independence, there are strict controls in place in relation to non-audit work performed by the external auditors.

The external auditors or a firm or corporation affiliated to the auditors’ firm can be engaged to perform non-audit services that are not, and are not perceived to be, in conflict with the role of the external auditors. The external auditors should be appointed for other service engagements only when they have specific or unique knowledge or expertise. This excludes audit related work in compliance with statutory requirements.

The prohibition of non-audit services is based on three (3) basic principles as follows:

a. external auditors cannot function in the role of Management;
b. external auditors cannot audit their own work; and
c. external auditors cannot serve in an advocacy role of the Company, subsidiaries and joint ventures.

The external auditors shall observe and comply with the By-Laws of the Malaysian Institute of Accountants in relation to the provision of non-audit services, which include the following:

i. accounting and book keeping services;
ii. valuation services;
iii. taxation services;
iv. internal audit services;
v. IT systems services;
vi. litigation support services;
vii. recruitment services; and
viii. corporate finance services.

All engagements of the external auditors or a firm or corporation affiliated to the auditors’ firm to provide non-audit services are subject to the approval/ endorsement of the Committee. Prior approval of the Committee must be obtained before commencement of the works while taking into account the nature and extent of non-audit services and the appropriateness of the level of the fees. The Committee should avoid situations where the audit firm inadvertently assumes the responsibilities of Management in the course of providing non-audit services. Management shall obtain confirmation from the external auditors that the independence of the external auditors will not be impaired by the provision of non-audit services.



The audit partners (lead engagement partner, signing partner, key audit partner and engagement quality control reviewer) responsible for the external audit of the Company and its subsidiaries are subject to rotation at least every seven (7) financial years.



In the event of a former partner of the external audit firm of the Company (this applies to all former partners of the audit firm and/or the affiliate firm, including those providing advisory services, tax consulting etc) being appointed as a member of the Committee, he/she shall observe a cooling-off period of at least three (3) years before such appointment.



The external auditors shall:

a. issue an annual audit plan for review and discussion with the Committee;
b. at the conclusion of the audit review, shall discuss findings, significant audit weakness and audit related recommendations with the Committee and Senior Management; and
c. provide a management letter to the Committee upon completion of the annual audit.



In discharging its duty, the Committee shall carry out an annual assessment in assessing the suitability, objectivity and independence of the external auditors which shall encompass an assessment on:

i. the qualifications, competency, resource capacity of the external auditors;
ii. the audit quality and candour of the auditor’s communications with the Committee and the Company;
iii. the professional scepticism of the external auditors; and
iv. appropriateness of audit fees to support a quality audit.

The assessment should also consider the information presented in the Annual Transparency Report of the audit firm. If the audit firm is not required to issue an Annual Transparency Report, the Committee is encouraged to engage the audit firm on matters typically covered in an Annual Transparency Report including the audit firm’s governance and leadership structure as well as measures undertaken by the firm to uphold audit quality and manage risks.

The Committee may also request the CFO and/or Chief Audit Executive to perform the annual assessment of the external auditors.

Where the performance of the external auditors assessed as being unsatisfactory, the Committee shall determine and recommend to the Board the course of action, which may include:

a. discussion with the external auditors to resolve performance issues;
b. replacement of members within the external auditors’ team; or
c. commencement of a competitive tender process in order to select a new external auditor.



This Policy shall be reviewed periodically and may be amended as and when necessary to ensure that it continues to remain relevant and appropriate.