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Internal Audit Organization and Operation

I. Internal Audit Organization and Staffing
 
(一)
 The Internal Audit unit directly subsidiary to the board of directors is in the Office of Internal Audits according to the organizational structure of ICP DAS.
 
(二)
 A chief internal auditor (CIA) is appointed or dismissed on the agreement of the company’s board of directors. The auditors’ information, such as name, age, educational background, experience, service seniority, training received, etc., shall be reported to Taiwan’s Financial Supervisory Commission (FSC) in the format prescribed through the FSC’s Internet information system for future reference by the FSC by the end of every January.
 
(三)
 In addition, substitutes are appointed for internal auditors in the company, whose eligibility criteria and training hours are all in accordance with the regulations of the FSC. Although the substitutes may also work in other departments, they shall avoid auditing their service departments by the regulations.
 

II. Operation of Internal Audits
 
(1) Implementation of Internal Audits
 
1.
 The Office of Internal Audits shall draw up the next annual audit plan according to the risk assessment results each year, including the items listed in Article 13 of the “Regulations Governing Establishment of Internal Control Systems by Public Companies” as the annual audit plan.
 
2.
 The Office of Internal Audits shall check the implementation of the audit items in the annual audit plan monthly, submit the audit report and transmit the report to the  independent directors for review by email before the end of the following month.
 
3.
 The Office of Internal Audits shall present a report on its internal audit business at the quarterly board of directors meeting to explain the implementation of the internal audits and the operation of the internal controls.
 
4.
 The Office of Internal Audits shall urge the parent company and its subsidiaries to conduct self-assessment at least once a year. Each unit shall fill out its self-assessment report. The Office of Internal Audits shall first verify and then submit it to the general manager and the chairperson for further review. The results of the self-assessment report shall serve as the primary basis for evaluating the effectiveness of the overall internal controls and issuing the Statement on Internal Control.
 

(2) The Regular Internet Information System Report of Internal Audit
 
1.
 Reporting the basic information of the internal auditors in the current year and the training in the previous year to the FSC at the end of every January.
 
2.
 Reporting the implementation of the audit plans in the previous year to the FSC at the end of every February.
 
3.
 Reporting the Statement on Internal Control in the previous year to the FSC at the end of every March.
 
4.
 Reporting the improvement of internal controls deficiency and abnormality in the previous year to the FSC at the end of every May.
 
5.
 Reporting the audit plans for the following year to the FSC at the end of every December.
III. The internal audit unit shall send reports to Audit Committee members for review every month and let the Audit Committee members evaluate whether the design and implementation of internal control are adequate. Besides, the internal audit unit shall have face-to-face interviews with the Audit Committee members at the quarterly Audit Committee. In the event of a major abnormality, the internal audit unit may convene a meeting at any time.
 

IV. Communication of the Independent Directors and Supervisors with CIA and Certified Public Accountant (CPA)：
 
 
 Date
   Communication Matters with the CIA  Communication Matters with CPA   Communication Results  
 2022/3/14 
The internal audit meeting 
  • Reviewing the Internal Audit Report
  • Reviewing the 2021 Statement of Internal Control  
  • Meeting communication (status about financial, business and internal audit)   
  • The 2021 communication with the governing body at the audit completion stage. (descriptions about materiality, critical audit matters, internal control, subsequent events and independence.)  
  • The 2022 communication with the governing body at the audit planning stage.  
  • The independent directors have no objections and agree to approve the Statement of Internal Control. 
  • The supervisors have no objections.  
2022/4/29
  • Reviewing the Internal Audit Report
  • Written communication (status about financial, business and internal audit)   
  • The independent directors have no objections.   
  • The supervisors have no objections.   
2022/8/1
Audit Committee
  • Reviewing the Internal Audit Report   
  • The 2022 Q2 communication matters with the governing body.  
The independent directors have no objections.   
2022/11/7
Audit Committee
  • Reviewing the Internal Audit Report
  • Amendment of “Internal Control System” and “Internal Audit System.”
  • Reviewing the 2023 internal audit plans 
The independent directors have no objections and agree to adopt the internal audit plan. 
2023/3/13 
Audit Committee
  • Reviewing the Internal Audit Report
  • Reviewing the 2022 Statement of Internal Control  
  • Meeting communication (status about financial, business and internal audit)   
  • The 2022 communication with the governing body at the audit completion stage. (descriptions about materiality, critical audit matters, internal control, subsequent events and independence.)  
  • The 2023 communication with the governing body at the audit planning stage.  
The independent directors have no objections and agree to approve the Statement of Internal Control. 
2023/5/5
Audit Committee
  • Reviewing the Internal Audit Report
The independent directors have no objections.   
2023/8/8
Audit Committee
  • Reviewing the Internal Audit Report
  • The 2023 Q2 communication matters with the governing body.  
The independent directors have no objections.
2023/11/6
Audit Committee
  • Reviewing the Internal Audit Report
  • Amendment of “Internal Control System” and “Internal Audit System.”
  • Reviewing the 2024 internal audit plans 
  
The independent directors have no objections and agree to adopt the internal audit plan. 
 
V.The CIA’s appointment or dismissal  shall be approved by the resolution of the board of directors. ICP DAS’s chairperson shall authorize the CIA’s performance reviews and remuneration.
The appointment and dismissal of internal auditors of the company shall be reported to the company's board of directors. The evaluation and remuneration of internal auditors are based on the regulations of the " Regulations for Appointment," " Regulations for Remuneration," " Regulations for Attendance," and " Regulations for Performance." The evaluation is carried out twice a year. The evaluation and remuneration mentioned above are signed and submitted to the directors for approval according to the sign-off process.


 
 
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