Purpose

To assist the board of directors and managers in inspecting and reviewing deficiencies in the internal control system and measuring the effectiveness and efficiency of operations. Timely improvement suggestions are provided to ensure the continuous and effective implementation of the internal control system and to serve as a basis for reviewing and amending the internal control system.

Organization

The company’s internal audit is an independent unit directly under the board of directors. There are two full-time audit personnel, including the audit manager and their subordinate auditors. The appointment and dismissal of the audit supervisor must be approved by the audit committee and then submitted to the board of directors for resolution. The appointment, evaluation, and salary of internal audit personnel are handled in accordance with the company’s relevant salary system regulations.

Functions and Operations

Auditors should uphold a spirit of independence, maintain an objective and fair stance, and execute their duties with integrity and diligence, paying professional attention as required. In addition to regularly reporting audit operations to each independent director, the audit supervisor should also attend board meetings to report.

The internal audit implementation guidelines stipulate that internal audits review the company’s operational procedures and internal controls, and report whether these controls are appropriately designed and effectively executed in daily operations. The review scope covers all units, operations, and subsidiaries of the company.

Audit work is mainly carried out based on the audit plan approved by the board of directors, which is formulated according to risk assessment results. Special audits or reviews are conducted as needed. Reports on deficiencies and anomalies in the internal control system are regularly produced and followed up on. Besides providing the board of directors and the general manager with the basis for evaluating the overall effectiveness of the internal control system and issuing an internal control system statement, it also provides management with another channel to understand existing or potential control weaknesses for timely response.