Internal Audits

Structure of Internal Audits

  1. Designated Internal Auditor: subject to the Board of Directors.
  2. Designated Audit Staff: 4.
  3. The appointment and removal of the Audit Supervisors is subject to approval by the Board of Directors.

Internal Audit Operations

  1. Internal Audits shall be conducted according to "The Company Disclosure of Processing Guidelines for the Establishment of Internal Control Systems" and relevant regulations issued by the "Finance Supervision and Management Committee"
  2. The scope of internal audits is as follows:
    1. Assisting the Board of Directors and managers to investigate and compensate for deficiencies within internal control systems; and to assess the efficiency and effectiveness of company operations. The audits shall include appropriate suggestions for improvement to ensure continued maintenance of internal control systems and to serve as a basis to modify internal control systems.
    2. A risk assessment to be conducted annually at the end of December. Formulating an "Annual Audit Plan" and submitting the same to the Board for approval. Internal audits shall be conducted according to the "Annual Audit Plan" and compiled into an "Audit Report." An "Internal Audit Issues and Improvement Notice" shall be included in the "Audit Report" to address issues or efficiencies found within internal control systems. The notice shall notify departments under audit to fix deficiencies or issues and to make quarterly progress reports until said issues are fixed.
    3. Once completed, the "Audit Report" and "Internal Audit Issues and Improvement Notice" shall be submitted to each Independent Director prior to the specified "Audit Report" publication date.
    4. Performing repeated and oversight analysis of Internal Control System Self-Assessments performed by each department. Compiling an "Internal Audit Self-Assessments Report" describing the progress in improving deficiencies and issues raised by the departments themselves, and submitting the same to the management team to evaluate the overall efficiency of internal control systems; and prepare an "Internal Control System Statement" to submit to the Board of Directors.
    5. Yearly Internal Audit Reporting Deadlines:
      1. Dec. 31- Annual Audit Plan (submitted to Board for approval)
      2. Jan. 31: Name Internal Auditors
      3. Feb 28: Progress Report on Previous Audit Plan
      4. March 31: Statement on Internal Control Systems (submitted to Board for approval)
      5. May 31: Progress Report on Issues and Deficiencies Raised in Previous Audit Plan
    6. Internal Audit Supervisors shall make individual reports to the Board of Directors as outlined in company regulations.
    7. Internal Audit Supervisors shall meet with Independent Directors annually.

Management Principles Regarding the Appointment, Dismissal, Evaluation, and Compensation of Internal Auditors

The appointment, dismissal, annual evaluation, and compensation of Internal Auditors shall be conducted in accordance with the following regulations and submitted by the Internal Audit Supervisor to the Chairman for approval.
  1. The recruitment, appointment, transfer, or dismissal of internal auditors is governed by "The Internal Control Mechanisms for the Personnel and Payroll Cycle", "Regulations for the Appointment and Promotion (Transfer) of Personnel" and the "Stuff Code of Conduct"
  2. The evaluation of Internal Auditors shall be conducted in accordance with "Regulations for the Annual Performance Evaluation of Personnel"
  3. Compensation for Internal Auditors shall be given in accordance with "Compensation Regulations" and "Annual Bonus Regulations"

Communication Between Accountants, Internal Audit Supervisors, and Independent Directors

  1. Communication with Independent Directors
    1. Independent Directors shall hold one meeting with Internal Audit Supervisors and Accountants annually.
    2. Internal Audit Supervisors shall make regular reports of the following to members of the Audit Committee:
      1. The Annual Audit Plan
      2. Efficiency Evaluation of the Internal Control System
      3. Progress Report on Internal Audits
    3. Accountants shall attend at least one meeting of the Audit Committee annually, and make a report of annual results.
    4. Any major problems or individual issues that Independent Directors, Audit Supervisors, or Accountants deem worthy of discussion may be addressed by calling a special meeting.
  2. Meeting Between Independent Supervisors, Audit Supervisors, and Accountants

Individual Communication Between Independent Directors and Internal Audit Supervisors
Audit Committee Communication focus Attendees Communicate results
Audit Committee
2022.3.11
Communication focus
  1. Internal audit business report.
  2. Amendment to the company's internal control system.
Attendees
Each meeting Three independent directors:
OU, YU-LUN
YU, NENG-YUAN
LIN, KO-WO
Full attendance.
Communicate results
The audit supervisor attended all the meetings to report as a non-voting delegate, and completed the implementation, reporting and tracking of the instructions of the independent directors.
The independent directors had no special suggestions.
Individual Communication Between Independent Directors and Accountants
Corporate governance communication meeting Communication focus Attendees Communicate results
Certified Public Accountants Independent directors
Corporate governance communication meeting
2022-03-11
Communication focus
  1. Description of Key Audit Matters ("KAM")
  2. Overall summary of audit results
  3. Type of audit opinion
  4. Materiality and uncorrected misstatement in the current period
  5. Significant deficiency in internal control
  6. Other communication matters
Attendees:Certified Public Accountants
Hsiao, Ying-Chia
Attendees:Independent directors
Independent directors:
OU, YU-LUN
YU, ENG-YUAN
LIN, KO-WU
Communicate results
After the certified public accountant separately communicating with and descripting the content to the independent directors, each independent director had no special suggestions.