The Auditor General found governance issues with in the financial year 2009, states the Auditor General in his report on the review of public enterprises 2020-2021 that was tabled in Parliament recently.
The Auditor General said having an effective corporate governance was essential considering the scale and the nature of operations of the company.
The audit found delay in the submission of the draft financial statements for the financial year 2009 and that there is no internal audit function neither an audit committee to deliberate on monthly management reports such as absence of disaster recovery plan, business continuity plan, risk management policy, human resource manual, strategic plan and code of conduct policy.
“Absence of good governance practices increases the risk of inconsistent financial practices and application of procedures, thus providing an opportunity for fraud and errors to take place,” states the audit report.
“The late preparation of the annual financial statements diminishes its usefulness for decision making purposes.
“Establishing an effective internal audit function/committee can provide assurance to the board and management whether its governance and internal control processes are operating effectively.”
The Auditor General recommended the company should ensure that annual financial statement is prepared and submitted within six months of the balance date and that it should consider establishing an internal audit function or subcommittee or finance sub-committee within the company to oversee the management of finances.
Food Processors Pte Ltd said management was working to engage an audit firm for internal audit services on a quarterly basis for three years to provide independent assurance that the company’s risk management, governance and internal control processes are operating effectively.
