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Corporate Governance
Internal Audit

Internal Audit

Internal Auditing Structure and Its operations
1. Structure and Division of Audit and the It’s object
According to the organizational structure set forth in the constitutional documents, a Chief Auditor is set to deal with internal auditing for the company. The division of the audit directly report to the board of directors of the company, Head of the division and the assistant head of the division are set to manage department of examination, department of management, department of project, department of overseas offices, department of information system, managers and auditors are equipped as well. The auditors conduct internal auditing, examining and evaluating the ongoing efficiency of internal control system, rendering prompt advice. In addition, assist the board and the management perform their responsibility.
2. HR management for auditors
The appointment, dismissal, and evaluation of internal auditors shall be in accordance with the second item of Article 3 of the Bank’s internal audit operating standards: "The appointment, removal, promotion, rewards and punishments, rotations and evaluations of the Audit Division shall be signed by the Chief Auditor. After approval by the chairman of the board, the qualifications for promotion shall be handled in accordance with the "Keys for Promotion of Taiwan Business Banks" and "Procedures for Promotion of Taiwanese Business Banks". However, those involved in other management and business units should seek approval from Human Resources Department in advance. After it is reported to the general manager for approval, it will then be signed to the chairman for approval." The method of approving the salary and remuneration of internal auditors shall be handled in accordance with the key points of the bank's salary payment.
3. Audit business
The company enacts the organization, establishment and responsibilities of internal audits, and compiles and revises internal audit work manuals and work papers. The content includes evaluation of the internal control system regulations and business processes to determine whether the current regulations and procedures are adequate for Internal control, whether each unit implements internal control in accordance with relevant regulations and the rationality of its effectiveness, puts forward suggestions for improvement at any time, internal audit performs audit business in accordance with regulations, and regularly reports to the board of directors and audit committee.
4. Execution of auditing

The audit division of the company drafts an annual audit plan before the start of each year, and in accordance with the regulations of the competent authority, conducts general inspections and project inspections at least once a year for domestic business, financial, asset custody and information units, and at least once a year for other management units, Project inspections are conducted once; general inspections are conducted at least once a year for various operation centers and foreign business units; financial, risk management and legal compliance of subsidiaries are reviewed once every six months. In addition, a full-time staff is set up for the securities business to handle internal audit operations, and the Audit Office supervises and inspects once every six months. When conducting general inspections, the contents of the internal audit report will disclose the following items according to the nature of the inspected unit:

Review panel, comprehensive reviews, financial status, capital adequacy, operating performance, asset quality, equity management, management of board meeting operations, compliance with laws and regulations, internal control, related-party transactions, various business operations control and internal management, Customer data confidentiality management, information management, employee confidentiality education, consumer and investor rights protection measures, and self-checking and handling conditions, and evaluating them.

The business unit shall make improvements on inspection opinions or inspection deficiencies put forward by financial inspection agencies, accountants, internal audit units, and self-inspectors.

5. Continuous review and assessment
The audit division conducts continuous review, and tracking the improvements on the deficiencies put forward by financial regulators accountants, internal auditing units, and inspected units, then submitting a written report to the board and audit committee. The improvements are weighted as performance indicators, so as to give reward or punishment. Each business unit shall make continuous self-reviewing until deficiencies have been removed and report the improvement to audit division for confirmation.