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Corporate Governance

Internal audit management

Based on its risk assessment, ABC-AETC establishes an annual audit plan, which is approved by the board of directors for implementation. The internal audit unit submits monthly internal audit reports to independent directors for review and approval and presents financial reports to the Audit Committee and the Board of Directors and communicates with the directors and the CPAs during said meetings. In 2022, each department conducted its own internal control self-assessments on various aspects of its operations, including the update of business results, efficiency, target accomplishment, target accomplishment, reliability of reported financial information, and regulatory compliance, and found that the design and execution of internal control system to be effective at providing reasonable assurance for the abovementioned goals.
  • Purpose of Internal Audits
    The purpose of establishing internal audit within the Company is to evaluate the effectiveness and compliance of the current control policies and procedures of the internal control system. It also assists the Board of Directors and management in assessing and reviewing deficiencies in the internal control system and measuring the effectiveness and efficiency of operations. Timely improvement recommendations 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.
  • Audit Scope
    The scope of internal audit operations of the Company includes the evaluation and review of the effectiveness of various internal control systems designed and implemented by various units within the company and its subsidiaries.
  • Audit Subjects
    The scope of internal audit operations of the company includes all respective responsibilities of various units within the Company and all responsibilities of subsidiaries without dedicated internal audit personnel. If a subsidiary has dedicated internal audit personnel, their audit reports are reviewed, and the improvement of deficiencies and abnormal issues in the internal control system is tracked.
  • Audit Operational Procedures
    The Company's internal audit department prepares an audit plan for the next year by the end of each year based on relevant regulations and risk assessment results. The plan is submitted for approval by the Audit Committee and the Board of Directors before execution.
  • Types of Audit Operations
    1. Routine Audit Operations: Various audit operations are conducted in accordance with the annual audit plan approved by the Board of Directors.
    2. Regular Internal Audits: Specific audit items are audited based on instructions from the Company's Board of Directors, management, or specific projects or business needs.
    3. Self-assessment Operations: All units within the company and subsidiaries are encouraged to conduct self-assessment of internal control systems at least once a year, and their selfassessment reports are subsequently reviewed.
  • Reporting Process of Audit Reports
    1. In addition to thoroughly communicating the audit results of the annual audit items with the audited units, internal auditors should disclose deficiencies and abnormal issues in the internal control system that were discovered during the audit process in the audit report.
    2. After the audit report and follow-up report are reviewed, they are delivered to independent directors for review at the end of the month following the completion of the audit item.
    If internal auditors discover material violations or potential significant harm to the company, they should report to all members of the Board of Directors in addition to preparing an immediate report for review.
    3. After approval by the Chairman of the Board, the audit report is sent to relevant units for improvement if necessary.
  • Execution Status of Deficiency Improvement Tracking
    Internal auditors shall prepare follow-up reports at least quarterly for deficiencies and abnormal issues discovered during inspections until appropriate improvement measures have been undertaken to ensure that relevant units have taken timely and appropriate improvement measures.
  • Information Announcement Reporting Operations
    Internal auditors should, within the time frame specified in the "Regulations Governing Establishment of Internal Control Systems by Public Companies," complete various reporting operations in the required format through the online information system.

Interaction between independent directors and internal audit unit

The internal audit unit will deliver the audit reports and work papers issued by the monthly audit to the independent directors according to the progress. If the independent directors have questions or instructions after reviewing them, they will contact the internal audit unit by phone or email.
In addition to regularly reporting to the board of directors on the implementation of internal audits, the head of internal audit also communicates and discusses with independent directors in person, by phone, or via email, as appropriate, and communicates with independent directors at least once a year when no management and business management units are present. Convene a symposium on matters such as internal audit and internal control system implementation.

The communication situation between independent directors and internal audit manager is as follows:

 
meeting dateRelated motionsOpinions of independent directorsHandling the opinions of independent directors

2023/3/9

The first internal audit business report in 2023Independent directors have no opinionIndependent directors have no opinion

2023/5/10

The second internal audit business report in 2023Independent directors have no opinionIndependent directors have no opinion

2023/8/9

The third internal audit business report in 2023Independent directors have no opinionIndependent directors have no opinion

2023/11/10

The Fourth Internal Audit Business Report in 2023Independent directors have no opinionIndependent directors have no opinion
ABC Taiwan Electronics Corp