Evaluation on Auditor’s Independence

2. Internal Audit Operation

• The scope of internal audit activities includes the company’s financial, sales and operation systems, and evaluates the adequacy and effectiveness of the internal control systems.
• The chief audit executive must establish a risk-based plan annually and the internal audit unit performs internal audit activities in accordance with the annual audit plan approved by the board of directors. To assure the internal control systems can be implemented continuously and effectively, the internal auditor shall provide recommendations for improvements in a timely manner and conduct project audits as necessary.
• The internal control self-assessment reports, prepared by the company and its subsidiaries and reviewed by BORA on an annual basis, along with audit reports on findings of internal control systems serve as the primary basis for the board of directors and general manager to assess the overall effectiveness of the internal control system and to produce internal control system statement.
• The internal auditor shall follow up and review the audit deficiencies reported by the administrative authorities, accountants, and internal audit unit.
• Review the audit relevant documents submitted by each subsidiary:   Review the subsidiaries’ audit plans, the internal audit reports, the major audit deficient reports and the correction reports. Supervision the correction of any defects and irregularities in internal control systems of each subsidiary.
• Evaluate the performance of the internal audit of each subsidiary: Evaluate the performance of the internal audit operation of each subsidiary, and provide the performance review to the chairman of each subsidiary as part of the personnel appraisal.

3. The appointment, dismissal and evaluation of Internal Audit

According to the company’s ” Corporate Governance Practice Principles ” and “Grant of Authority”, the appointment, dismissal, evaluation and review, salary and compensation of internal auditors shall be submitted by chief audit executive to the chairman for approval. The appointment and dismissal of the chief audit executive shall be approved by the audit committee and submitted to the Board of Directors for approval. The content of relevant regulations has been disclosed in the company’s internal regulations section.

4. Summary review for the communication between independent directors and chief audit executive

• In the quarterly audit committee meetings, chief audit executive shall present the internal audit activities, the major audit deficiencies, and the corrections of any defects and irregularities of the internal control systems. Chief audit executive shall respond to questions raised by independent directors and improve according to their instructions.
• Chief audit executive shall submit the audit and follow-up reports for review by the independent directors by the end of the month next following the completion of the audit reports. If the independent directors have questions or instructions, the independent directors will communicate with Chief audit executive by telephone, email or in person.

5. Summary of communication between the independent directors and the auditor

The Company’s auditor communicates three times with the independent directors in 2022, communicated items referenced in the table below: