Your browser does not support JavaScript functionality. If webpage features are not working properly, please enable JavaScript in your browser.

The Organization and Operation of the Internal Audit Department

  • The subordination and functions
    • The Internal Audit Department is attached to the Board of Directors in the Bank's organizational structure, with the Head Auditor having responsibility for internal audit throughout the entire bank. The Department also has a Deputy Head Auditor, and an appropriate number of auditors to perform auditing function for the Bank. They examine and evaluate the internal control system, to estimate the system efficiency and to provide timely suggestion to assure the system can be implemented consistently and effectively, and help the Board of Directors and management level to perform their responsibilities exactly.
  • The scope of the internal auditing
    • The Bank sets Internal Audit's organization and scope of work, and edits the Internal Audit manual and work papers, to evaluate all rules related to internal control procedures and workflow. This allows the Bank to determining if the current regulations and processes are observing an appropriate level of internal control, if each department is implementing the internal controls as per the relative regulations, and if the execution of internal controls is reasonable and efficient. The Internal Audit Department thereby makes timely improvement suggestions concerning the aforementioned areas, carries out the audit function in accordance with the relevant regulations, and periodically reports to the Board of Directors and supervisors.
  • Execution of Audit Work
    • Before the start of each year, the Bank's Audit Department will draft next year's audit plan and, as required by the financial authorities, will perform annually at least one general inspection and one specific inspection on each domestic branch, financial custody and information department, and will perform at least one specific inspection on other administrative departments. As regards each operation center and overseas branch, a general inspection must be performed at least once a year. While for the securities business, a specialized internal auditor shall be assigned, and the Internal Audit Department must perform one overall audit once every six months. When performing and completing a general inspection, the contents of the Internal Audit Report shall disclose the following features:
      1. Scope of inspection, general comment, financial condition, capital adequacy,business operation performance , asset quality, legal compliance, internal controls, transactions between interest conflict parties, business operation controls and management, customer information confidentiality management, information management, information confidentiality education for staffs, self-inspection, and evaluation of the same.
      2. Whether the branches have made appropriate corrections on the defects and irregularities which are discovered in the inspection by financial authorities, CPAs, Internal Audit, or branch's own inspectors, as well as on all the items to be improved listed in the Internal Control System Statement.
  • Follow-up inspections and appraisals
    • Internal Audit shall continue follow up and review all defects and irregularities which are discovered in inspection by financial authorities, CPAs, Internal Audit, or branch's own inspectors, as well as on all the items to be improved listed in the Internal Control System Statement, and furthermore report in writing to the Board of Directors and supervisors on the status of improvements. Moreover, the aforementioned items shall be included as a major factor in the relative branch or department annual performance review. The branch or department, which has undergone inspection, shall ensure that the defects and irregularities are earmarked for follow-up and periodic self-inspections until the Internal Audit Department confirms the rectification.