Diyasa is preparing for its flotation on the Bursa Malaysia and, at present, is concentrating on audit procedures. It needs to establish an audit committee, and also address some issues with regard to its external auditors. The current auditors, Sylo and Partners, are willing to continue their appointment but concerns have been raised by the board in respect of Sylo and Partners independence, due to the amount of non-audit work they have carried out for Diyasa in the past. The Chairman of Diyasa is of the opinion that new auditors should be appointed and that the appointment should be put out to tender. The CEO disagrees and would like Sylo and Partners to remain, in order to provide continuity. The board has requested that you to prepare a paper for its consideration. Required Prepare a paper for the board of Diyasa in which you:

(a) Explain the requirements for the composition of an audit committee, and its role and responsibilities, as required by the Malaysia Corporate Governance Code.

(b) Advice how Diyasa should deal with the issues raised in respect of the current auditors