Purpose of Internal Audit

The purpose of establishing the Internal Audit function is to assist the Board of Directors and management in examining and reviewing the deficiencies of the internal control system, and to reasonably ensure the effectiveness and efficiency of operations, the reliability, timeliness, transparency, and compliance of reporting, and adherence to relevant laws and regulations. The Internal Audit function provides timely recommendations for improvement to ensure the continuous and effective implementation of all systems.

Organization of Internal Audit

The Company has established an Internal Audit unit under the Board of Directors. In accordance with the Company’s scale, business operations, management requirements, and relevant regulations, the unit is staffed with one Chief Audit Officer and a designated deputy.
The appointment, dismissal, evaluation, and compensation of internal auditors are conducted in accordance with the Company’s authority and approval regulations, and must be submitted by the Chief Audit Officer for the Chairman’s approval.

Operations of Internal Audit

When performing audit tasks, the Internal Audit unit shall fully communicate the results of annual audit items with the audited departments. Any deficiencies or irregularities in the internal control system identified during evaluations shall be truthfully disclosed in the audit report, which will be submitted for approval and followed up. At least quarterly, a follow-up report shall be prepared until improvements are completed, ensuring that the relevant departments have taken appropriate corrective measures in a timely manner.
The Internal Audit unit also supervises internal departments and subsidiaries in conducting annual self-assessments of the effectiveness of their internal control systems. The Internal Audit unit subsequently reviews these self-assessment reports, consolidates the results, and uses them as a basis for the Board of Directors to issue the Statement of Internal Control.