Internal Audit Organization And Operation

Assist the Board of Directors and managers to check and review the defects of the internal control system and measure the effects and effectiveness of operation while providing timely suggestions for improvement to ensure continuous and effective implementation of the internal control system and serve as a basis regarding the review and amendment of the internal control system.

Organization of Internal Audit
The Company has established a designated internal audit unit subordinate to the Board of Directors to manage the internal audit work. According to the Company scale, business conditions, management requirements and other regulations of related laws, the Company assigned an audit supervisor with appropriate numbers of qualified full-time internal audit personnel. According to company regulations, the appointment and removal of the Head of Internal Audit shall be approved by the Audit Committee and submitted to the Board of Directors for resolution. The appointment, removal, evaluation and remuneration of internal audit personnel shall be submitted by the Head of Audit to the Chairman of the Board for approval.
Operation of Internal Audit
I. Wholetech has established the “General Principles for Internal Audit System”: The scope of the audit, the audit plan, responsibility and notice of the audit personnel shall be applied.
Scope of audit: The scope of the audit includes the Company’s units, subsidiaries and affiliates.
Audit plan: The audit personnel of the Company conduct the audit work on a scheduled (annual audit plan) and non-scheduled (project audit) basis. By integrating the implementation of the above scheduled audit and the non-scheduled project, we provide the operating status of the internal control functions for the management and provide in a timely manner, an additional channel for the management to understand the existing or potential defects.
Responsibilities of the audit personnel:
  1. The internal audit unit is subordinate to the Board of Directors and the audit personnel shall follow the instruction and supervision of the President to conduct the internal audit work of the Company.
  2. In case of doubts during the performance of duty, the audit personnel shall give suggestions for handling after receiving a reasonable explanation from the concerned party with a full understanding of the situation.
  3. When conducting the audit work, the audit personnel shall aim at the following tasks:

    (a) Audit whether internal controls are effective and complete.

    (b) Audit the compliance level of the internal controls and their impact on each operating activity.

  4. In case of a serious violation of the Company rules, in which the Company may suffer from great damage, the audit personnel shall immediately make a report for submission of approval and inform the supervisors and independent directors.
  5. When performing their duties, the audit personnel may inquire about the unit concerned about detailed information and access the account books, reports and all relevant files at all times. The supervisor and the responsible personnel of the audited unit shall provide full cooperation without any concealment, obstruction, or refusal.
  6. After the approval of the submitted audit and follow-up reports for review, the reports shall be submitted to the supervisors and independent directors for review by the end of the month next following the completion of the audit items with audit trail retained.
  7. The internal audit officer shall attend and deliver a report to a Board of Directors and present reports in order to strength the Board's and supervisors' oversight and guidance of Internal Audit operations.
The audit personnel shall pay attention to:
  1. The audit personnel shall be detached, independent, objective and impartial and have a truth-seeking spirit and kind attitude for cooperation in faithfully performing their duties.
  2. The audit procedure shall be conducted based on the audit plan to avoid unnecessary discussion and consultation and minimize the impact on the work of the responsible personnel in the audited unit. In case of unclear matters, the audit personnel shall raise question(s) at the appropriate time until the matter is thoroughly understood by the personnel.
  3. When performing their duties, the audit personnel shall not argue with the audited personnel regarding the defects of the system and shall check with the audited personnel in case of error without face to face criticism. If the audited unit personnel have any complaints or suggestions, the audit personnel shall listen carefully without any dispute.
  4. The audit personnel shall be fully aware of the existing laws as well as the present internal systems and regulations of the Company. They also shall thoroughly understand the measures within the audited unit and special situations of the operating routine.
  5. The audit personnel shall fully understand the historical background, important document, and information as well as the contents of the past audit reports regarding the audited unit.
  6. For the audit result, the audit personnel shall provide reasonable determination based on a reliable foundation and sufficient and proper proof.
  7. The audit personnel shall protect the confidentiality of the information obtained due to duty performance without any disclosure besides the report submission. The audit personnel shall also pay attention to the security of the document and shall not commit any omissions.
  8. When conducting the audit work, the audit personnel shall draft an annual audit plan for the internal audit operation and execute accordingly.
  9. The audit personnel shall audit and assess the budgeted finance, business, operating performance and internal control system based on the annual audit plan and submit an audit report attached with working paper and random inspection information for reference; the internal audit unit of the Company shall review and approve the audit reports or self-inspection reports submitted by the subsidiaries and follow up the improvement status regarding the defects and irregularities of the internal control system.
Ⅱ .Procedures for the Self-inspection of Corporate Internal Control
The Company shall urge all internal units and subsidiaries to conduct self-inspection, have its internal audit unit review the self-inspection reports prepared by all units and subsidiaries. As well as submit the self-inspection reports, together with the reports on the correction of defects and irregularities of internal control system discovered by its internal audit unit, to serve as the primary basis for the Board of Directors and general manager to evaluate the overall efficacy of all internal control systems and to produce Internal Control System Statements.
The Internal Control System Statement shall be submitted to the website designated by the competent authority by the end of April next following the year of the inspection and shall be disclosed on the annual report and prospectus.