several issues pertaining to the breakdown of the internal audit function, which led to the manipulation of the rates. despite the group internal audit functions carrying out their routine audits in this area, deficiencies in the banks ’ systems, controls and policies were not adequately highlighted. the lessons learnt from the above cases and others clearly reinforce the key roles played by both the internal audit function and the audit committee. my view is that the strength and effectiveness of the internal audit function will influence the risk and compliance culture in an organisation. the function has to continually be refreshed such that it remains robust and effective. bis central bankers ’ speeches clearly, the job is now more difficult and challenging than ever, given the increased expectations by stakeholders and heightened scrutiny when things go wrong, as well as increasing obligations under the statute that place additional fiduciary responsibilities on audit committee members. i would like to share my thoughts on four matters where efforts are necessary to raise the bar on audit standards and audit quality. firstly, the audit coverage and scope should not be confined to compliance or risk - based parameters. the audit scope should be holistic, encompassing new risk areas and tail risk events that originate from the evolving operating environment and financial landscape. the process of ascertaining the audit scope must be robust, such that audits focus on higher risk areas as the company grows and evolves in its products and processes. internal auditors should be constantly challenged to think beyond the scope of the audit framework and focus on the broader picture. the so - called ability to ‘ connect the dots ’ about the implications of the audit findings across the organisation is an important starting point to identify new and emerging risks. secondly, internal audit should move beyond compliance to strategic auditing and to provide value - added recommendations for the betterment of the organisation. my view is that before an organisation seeks to venture into new or higher risk areas of growth, it is imperative for the board and senior management to seek assurance from the internal audit function so that the risk and control frameworks are rigorous in identifying gaps in the system. the audit committee should identify opportunities where the internal audit function is able to add value, through consultation and advice on business process improvements. the input from the internal audit function would also be helpful to craft initiatives to embed good behavioural norms, ethical and responsible culture within the organisation. thirdly, the internal audit function must be supported by a strong quality assurance process. this requires internal auditors to be equipped with the re

. oil prices rallied to above usd50 per barrel from an average of usd33 per barrel in the first quarter of the year, and today, oil prices have settled back to around usd48 per barrel. the oil price is likely to remain volatile over the next few years due to oversupply and recordhigh oil inventories against slow demand especially in china. lng prices are also expected to remain low for a protracted period of time. 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 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. amid the changes in the financial landscape, there have been equally significant developments in the auditing standards both globally and locally. the standards and regulations are becoming increasingly tighter and more stringent. the institute of internal auditors ( iia ) for example, has proposed several changes to the internal audit standards, which are expected to take effect in january 2017. the changes to the standards are aimed at reinforcing the fundamental principles of internal auditing practices, promoting a broad range of