The internal audit procedures specify that the Internal Audit assists the board of directors and managers in checking and reviewing the deficiencies of the internal control system, measuring the effectiveness and efficiency of operations, and providing timely suggestions for improvement to ensure the continuous and effective implementation of the internal control system.
The Company's internal audit unit is subordinate to the Board of Directors and is staffed with the appropriate number of full-time internal auditors based on the Company's size, including one internal audit supervisor and two full-time internal auditors, totaling three persons.
Internal auditors must uphold detached and independent spirit; properly execute his/her duty based on objective and fair standpoints. In addition to regular reporting of the audit business to supervisors, the chief auditor should attend the board meeting.
Based on the outcome of the risk assessment, the internal audit business in our company determines the annual audit plan including concrete audit items, time, procedure, methods and so on. Auditors conduct auditing regularly or irregularly. Enclosed with working paper, relevant data and information, the audit result reports are submitted for approval to ensure the internal control system can be implemented effectively and sustainably.
To urge the Company's internal departments as well as the subsidiaries to yearly assess the effectiveness of internal control systems, the internal control self-assessments take place on the E-platform. After the initiator of self-assessment conducts the design of internal control scheme and execute the assessment with effectiveness, the internal audit department will review the self-assessment report from each department and subsidiary. The self-assessment reports along with any deficiency in internal control found by audit department and the status on improvements of abnormal cases will serve as the main basis for the Board of Directors as well as General Manager to evaluate the overall effectiveness of internal control systems in the Company and to issue the Declaration of Internal Control System. The Declaration of Internal Control System shall not only be released on the website appointed by Financial Supervisory Commission (FSC) within three months after the closure of a fiscal year but also be published on the Annual Report.
Inside the audit reports, internal auditors must disclose in absolute transparency the findings from internal auditing, the items from the Declaration of Internal Control System, self-assessment reports as well as any other deficiencies and abnormal cases in internal control identified by accountants. Internal auditors shall perform follow-ups and conduct tracking reports regularly to ensure relevant departments have taken proper corrective measures timely.
After the completion of audit reports and tracking reports, the completed audit items have to be presented to independent Board members for review by the end of next month. If any serious violation or significant damage to company identified by internal auditor, the submission to inform the independent Board members shall take place immediately.
Internal auditor shall provide the audit plan on next year before the closure of a fiscal year. The implementation of the previous year’s audit plan shall be declared within 2 months after the fiscal year and based on required formats via Internet Service Declaration System for FSC’s future reference. The findings of any deficiency in internal control and the status on improvements of abnormal cases shall be declared within 5 months after the fiscal year based on required formats via Internet Service Declaration System for FSC’s future reference.