The fundamentals of an internal audit function involve identifying risks that could threaten the viability of the company and keep it from achieving its goals, ensuring management fully understands these risks, and proactively recommending improvements to minimise these risks. Internal auditors are essentially the eyes and ears of the Audit Committee and the overall Board. The failure of audit functions can result in devastating consequences as seen in recent times. The case of the British Petroleum (BP) oil rig explosion in 2010 is one that reinforces the important role of the internal audit function. Occupational safety is widely regarded as a critical success factor for a company that undertakes oil exploration. The BP oil rig was awarded as the industry model for safety in 2009. However, in 2010, the oil rig exploded in the Gulf of Mexico, causing one of the worst man-made disasters in history. The U.S investigation commission attributed the disaster to the “failure of individuals involved to identify risks they faced and to properly evaluate, communicate and address them”. This indirectly highlighted the shortcomings of the internal audit function as a contributory source of failure in the lines of defence in the company. Some level of scepticism to consider the remote possibility that the safety measures in place may not work in the event of disaster, could have avoided the risk event from occurring. Another example is the LIBOR manipulation scandal involving several banks which culminated in substantial fines imposed by the UK Financial Services Authority (FSA).

LNG capacity start-ups in Australia and North America which will boost new LNG supplies amidst stagnating demand will put more pressure on LNG prices, hence further disrupting the LNG market. Due to low oil and LNG prices, the profitability of oil majors and National Oil Companies (NOCs) has been severely eroded. The impact has been pronounced. More than 300,000 oil and gas workers have been laid off globally since mid-2014; some USD 380 billion of global oil and gas projects have been deferred or cancelled; and more than USD 150 billion worth of assets have been planned for disposal or divestment. Given Malaysia’s openness and high financial and trade integration with the rest of the world, the Malaysian economy is not isolated from these developments. On the external front, lower global demand continues to weigh down on Malaysia’s export performance. Investment activities especially in the upstream oil and gas sector, contracted for the first time since the global financial crisis in 2015, after expanding by an average of 16% from 2010 to 2014. However, investment activity in the manufacturing and services sectors remained  BIS central bankers’ speeches  1  resilient, and is expected to underpin investment growth moving forward. Private consumption remained relatively resilient and anchored domestic growth, especially during the first half of the year, driven by sustained income and employment levels. Going forward, domestic demand is expected to remain a key driver of economic growth in Malaysia. We should expect Malaysian economic growth to range between 4.0 to 4.5 % for 2016.