Internal Audit Organization and Operations
1. Internal Audit Organization
The internal audit in our company is an independent unit, directly under the board of directors, and is dedicated to internal auditing tasks. In addition to regularly reporting audit activities to the Audit Committee, the head of internal audit also attends board meetings to report.
Our company’s internal audit unit is staffed with two full-time auditors, whose qualifications meet the legal eligibility requirements, and who continuously engage in further education to fulfill the required hours.
The appointment and dismissal of the head of internal audit must be approved by the board of directors; the appointment, dismissal, assessment (conducted twice a year), and compensation of internal audit staff are processed according to the internal personnel management regulations and reported to the chairman.
2. Internal Audit Operations
The internal audit unit upholds a spirit of detachment and independence, maintaining an objective and fair stance. It exercises due professional care in examining and evaluating the implementation of the company's internal control system and assessing operational efficiency. Based on the audit findings, it provides unbiased reports and timely recommendations for improvements to ensure the continuous and effective implementation of the internal control system, serving as a basis for reviewing and amending these controls.
The auditing work is primarily conducted according to the audit plan approved by the board of directors. This plan is developed based on four major aspects: stringent legal requirements, audit frequency, results of risk assessments, and the level of concern from directors and management. Additionally, special audits or reviews are conducted as needed. Audit reports include working papers and relevant documents. Any deficiencies or irregularities in the internal control system identified during audits are not only clearly disclosed in the audit reports but are also followed up on until improvements are made to ensure that relevant units have taken appropriate corrective actions in a timely manner. The completed audit items are made available for review by the independent directors by the end of the month following completion.
3. Internal Control Self-Assessment
The internal audit unit reviews the self-assessment reports regularly performed by various units within the company. Based on the results of these reviews and the internal audit unit's findings on deficiencies and irregularities in the internal control system, a comprehensive self-assessment report on internal controls is prepared. This report serves as a basis for the general manager and the board of directors to evaluate the overall effectiveness of the company's internal control system and to issue a statement on the internal control system.
The declaration of the internal control system is publicly disclosed on a designated website within the timeframe set by the regulatory authority, and is also published in the annual report. This process not only ensures transparency but also reinforces the company’s commitment to maintaining robust internal controls.