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Through the 2016 Annual Report, the Board ofDirectors expressed satisfaction that the Company’s risk management andinternal control operations were fully effective. In the annual report, the companydid not disclose the relevant information on risk management and internalcontrol system in detail and also maintain the internal control system and riskmanagement policy that has been used for the past five years. From that, itshows that the company seldom reviews and evaluates its internal control systemand its risk management policies.

However, not all risk management and internalcontrols are perfect and flawed. In general, internalauditors may focus only on the risks that need to be prioritized, ignoringthese small ones and fail to detect these frauds and errorsduring the audit process. Not only that, it is possible that senior management doesnot report relevant information about the failure of significant control overinternal control to the Board or misuse of the internal control system fortheir own interest. This is a pseudomorph of a good internalcontrol system.·      MTD ACPI Engineering BerhadIn the 2016 annual report, the Board considers thatthe risk management and internal control system of the company is sound andadequate and that deficiencies in internal control have been or are beingresolved during the financial year under review, although the relevantinformation has not disclosed the details in full. It can be seen that thecompany carefully reviewed the internal control system and risk managementpolicies compare to Ahmad Zaki Resources Berhad. Internal control deficienciesmay be due to lack of management supervision and perfunctoryattitude. Not only that, it’s possible that unethical behavior and poorworkmanship happen among the company staff as well as the senior management.

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Thishappens because of poor internal control and poor corporate governance. Unhealthyorganizational culture and failure of significant control over internal controlalways leads to poor performance of the company. Compliance RiskAhmah Zaki Resources Berhad and MTD ACPI EngineeringBerhadAs qualifies contractor of civil engineeringand structural construction works, the both companies must able to comply withrule and regulation that established by Construction Industry Development Board(CIDB). The following rules and regulation that the must be comply with:                I.         Federal Roads Act 1959Bills declaring federal roads,bridges, ferries and other modes of transport.

The law applies to the whole ofMalaysia. The Minister may, in consultation with the government of the countryconcerned, declare in any country any road, bridge, ferry or other means ofcommunication as a federation.              II.

         The Registration of Engineers Act 1967The provisions of the registrationof engineers and wholly-owned enterprises, Partnerships and corporate bodies toprovide professional engineering services and related purposes            III.         The Housing Development (Control andLicensing) Act 1966Provide for the control andlicensing of the housing development business in Peninsular Malaysia, protectthe interests of buyers and matters related thereto. Other than that, the whole process of construction workshould follow the procedure and requirement which set by regulatory agenciesand associations like The Board of Engineers Malaysia (BEM), TheBoard of Architects, Construction Industry Development Board(CIDB) and other regulatory bodies until the completion of the constructionwork. If the company fail to do so, they will be suffer huge losses. Thecompanies must also be responsible for any safety and quality issues before andafter the building or infrastructure is open to the public. In addition, thecost of compliance has cost companies too much in order to get construction projects.

   

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