Corporate Governance

Internal Audit Organization

The Internal Audit Department reports directly to the Board of Directors. Appointment or dismissal of the Head of Internal Audit must be approved by the Board in accordance with applicable regulations. The department is led by one Internal Audit Manager, who (i) defines job responsibilities, (ii) recruits qualified audit staff, and (iii) oversees all audit activities. Based on organizational planning and operational needs, two audit officers are assigned to carry out the work items specified in the annual audit plan; additional cycle audits or special-project audits are allocated by the Head of Internal Audit as required.

Functions of the Internal Audit Unit

• Investigate and assess the soundness, reasonableness, and effectiveness of the Company’s internal-control and management systems.
• Evaluate the efficiency with which each business unit implements corporate plans, policies, and assigned functions.

Appointment, Evaluation, and Remuneration of Internal Audit Personnel

• Head of Internal Audit – Appointment or removal requires prior consent of the Audit Committee and a resolution of the Board of Directors. Performance evaluation and remuneration are approved by the Board and thereafter reviewed periodically by the Remuneration Committee, which submits recommendations to the Board.
• Other internal auditors – Appointment, evaluation, and remuneration are handled in accordance with the Company’s personnel policies and are submitted by the Head of Internal Audit to the Chairperson for approval.

Internal Audit Operating Regulations

• Internal Audit Purpose

  The internal audit function assists the Board of Directors and management in examining and reviewing deficiencies in the internal-control system, measuring operational effectiveness and efficiency, and providing timely improvement recommendations. Its aim is to ensure that the internal control system remains effective and to serve as a basis for ongoing review and enhancement.

• Internal Audit Planning

  1. Annual Audit Plan – Based on risk-assessment results and regulatory requirements, the Head of Internal Audit sets audit priorities and prepares an annual audit plan that specifies:

     • Audit subjects
     • Audit items
     • Audit objectives
     • Audit period
     • Resources required

  2. Engagement Work Plan – In line with the annual audit plan, internal auditors draw up a detailed work plan for each audit engagement, covering:

     • Definition of audit objectives and scope
     • Collection of relevant information
     • Allocation of required resources
     • Confirmation of key areas and schedule
     • Design of audit procedures

Based on the results of risk assessments and applicable regulatory requirements, the Head of Internal Audit sets the priority of audit items and prepares the annual audit plan. The annual audit plan covers:

1. Establish audit programs that define objectives, procedures, and sampling scope and depth.
2. Collect, inspect, and analyze information, preparing documentation to support audit findings.
3. Prepare working papers for each audit step performed.
4. Communicate results – Upon completion of fieldwork, discuss findings fully with the management of the audited unit, allowing clarification and explanation; when necessary, obtain a corrective-action plan and expected completion date.
5. Issue the audit report, presenting objectives, scope, factual findings, and recommendations.
6. Follow up on corrective actions – Track all findings, recommendations, and the audited unit’s corrective-action plan to verify timely and satisfactory implementation.