Internal Audit

Internal Audit Organization

The Company has established an independent internal audit unit that reports directly to the Board of Directors. The unit is staffed with one Chief Internal Auditor and three to four internal audit staff members.

• Appointment and Dismissal of the Chief Internal Auditor: Must be reviewed and approved by the Audit Committee and subsequently submitted to the Board of Directors for final resolution.
• Personnel Management: The appointment, dismissal, evaluation, and compensation of internal audit staff are proposed by the Chief Auditor and submitted to the Chairman for approval. All auditors meet the qualification requirements mandated by the competent authorities.

Internal Audit Operations

Audit Objectives

The primary objective is to assist the Board of Directors and management in examining and reviewing deficiencies in the internal control system, as well as measuring the effectiveness and efficiency of operations. By providing timely recommendations for improvement, the unit ensures the continuous and effective implementation of internal controls and provides a basis for system revisions.

Audit Scope

The scope encompasses audits of internal control implementation at both the corporate and operational levels, as well as the review of self-assessments conducted by various management departments.

Audit Methodology

• Audit Planning: Audits are executed based on an annual audit plan approved by the Board of Directors. This plan is formulated based on identified risks; special project audits are conducted as needed.
• Audit Reporting: Upon completion of audit procedures, audit working papers are prepared to document the process, and a formal audit report is issued.
• Communication: Audit reports are submitted to the Independent Directors of the Audit Committee for review and are reported during regular meetings of both the Board of Directors and the Audit Committee.
• Follow-up: Following the approval of audit reports, the unit tracks the status of identified issues. Follow-up reports are produced to ensure that relevant departments have taken appropriate and timely corrective actions until all issues are fully resolved.
• Verification and Validation: The unit reviews the internal control self-assessment documents executed by management. This includes verifying the accuracy of the execution, reviewing documentation to ensure quality, and consolidating these findings with audit results to report to the Audit Committee and the Board of Directors.