Auditing Department structure and responsibilities
Effective auditing systems can not only protect against fraud, they can also provide early identification of potential internal and external risks, preventing or reducing the chance of crises arising. In this way, our auditing system helps the Group properly implement risk management and legal compliance, thus ensuring stronger corporate governance.
The Company has established a sound risk management policy, along with effective corporate governance and internal control mechanisms, and through independent internal auditing, conducts reviews and audits of operations. The Company’s Auditing Department is overseen by the board of directors and has oversight of auditing Company-wide. The department is led by a general auditor, and in addition there is one deputy general auditor and other auditing personnel. The head auditor evaluates overall business needs in accordance with the “Yuanta Financial Holding Company Internal Auditing Procedures”, and directs staff from each subsidiary in handling internal auditing functions for their respective subsidiary, ensuring that the Company and each subsidiary maintains an effective auditing system which holds ultimate responsibility.
Qualifications and Training of Internal Auditing Personnel
The qualifications of internal auditing personnel must be in compliance with regulations set forth in the “Regulations Governing the Implementation of Internal Control and Audit Systems by Financial Holding Companies”. To raise their level of proficiency, each year auditing personnel participate in finance-related training courses arranged by an institution appointed by the government authority or classes arranged internally by the Company or its subsidiaries.
Appointments, Removals, and Appraisals of Internal Auditing Personnel
The Company has established internal auditing implementation methods. Appointments, removals, promotions, rewards and punishments, rotations, and appraisals of personnel in the Auditing Department shall be signed by the auditor-general and approved by the chairperson of the board of directors before processing. However, in the case of personnel of other management units, the Human Resources Department shall be consulted first before reporting to the president for agreement prior to signing to the chairperson of the board for approval.
The Company’s Auditing Department has established guidelines entitled the “Yuanta Financial Holding Company Internal Auditing Implementation Methods”. These methods evaluate overall policies, Auditing Department structure and the qualifications of internal auditing personnel, chain of command, and track any deficiencies and relevant improvements with supplementary provisions. The established internal control system allows for close evaluation of the degree of effectiveness of implementation of the internal auditing function.
Execution of Internal Auditing
At the end of each year, the Auditing Department drafts an annual audit plan for the following year, and according to its policies, conducts a comprehensive business operations audit at least once a year and a specific project business operations audit once every six months. Additionally, based on the classification of our management structure, the Company conducts a specific project audit once every six months on the financial standing, risk management and legal compliance of each direct subsidiary. (Subsidiary companies in industries that require a different frequency of internal audits must act in accordance with those regulations).
The comprehensive operations audit that evaluates each area of business contains an audit report that covers the following:
Auditing scope, overall assessment, financial status, capital adequacy, operational performance, asset quality, equity management, operational management of the board and audit committee, legal compliance, internal control, transactions with affiliated parties, control and internal management of each business operation, management of confidential customer data, data management, training employees in confidentiality matters, the status of the measures being used in the protection of consumer and investor rights, and self-evaluation methods.
Items recommended for review or audit listed by the relevant financial authorities and by the Auditing Department, or those listed in the Statement of Internal Control System may at time prove to be inadequate. In these cases, the appropriate changes are made to strengthen the concerned items or make up for any deficiencies.
Financial inspection organizations, accountants, internal auditing divisions, opinions raised by internal self-auditing, and the status of items mentioned in the internal control statement that are identified for improvement.
The Auditing Department tracks and re-examines any items aimed at strengthening any deficiencies in auditing functions of the financial review division, accountants, and Internal Auditing Department. A report is submitted to the board of directors and audit committee with the main items for continued review listed.
Evaluation of the Results of Subsidiaries' Internal Auditing
To ensure ongoing effectiveness of each subsidiary’s internal control and auditing system, and to strengthen each subsidiary’s internal auditing capabilities, the Company has established the “Yuanta Financial Holding Company Key Assessment Items in Affiliated Companies’ Internal Auditing”. Each year, the head auditor must report to the board of directors on the results of their review of each subsidiary’s internal auditing performance, and the results are sent to the board of directors of each subsidiary, for them to assess any necessary changes in personnel. Direct subsidiaries should refer to the Company’s relevant guidelines, evaluate the subsidiaries that have set up audit departments, and report to the Company’s Auditing Department.
Oversight of Legal Compliance and the Internal Control Self-Evaluation System
The Company has implemented the “Yuanta Financial Holding Company Internal Control Self-Evaluation Procedures”. The Auditing Department is responsible for overseeing the Company and subsidiaries’ periodic self-evaluation of the internal control system, and compiling the results. The Company’s Legal Department is responsible for ensuring compliance with all laws regarding the Company’s self-evaluation. Together, the two departments mutually collaborate on the Company’s “Statement on the Internal Control System”.
Auditing Office Organization Chart
Descriptions of the Communications between the Independent Directors and the Internal Auditors or the Independent Auditors
These Closed Door Sessions relate to corporate finance and operations matters, and are between the Independent Directors and the Internal Auditors or the Independent Auditors. The communication principles are as follows,
The internal auditors have sent the audit reports to the members of the Audit Committee periodically and presented the findings of all audit reports in the quarterly meetings of the Audit Committee. The head of Internal Audit will immediately report to the members of the Audit Committee any material matters.
The Company’s independent auditors have presented the findings of their quarterly review or audits on the Company’s financial results. Under applicable laws and regulations, the independent auditors are also required to immediately communicate to the Audit Committee any material matters that they have discovered.