Internal Audit

Corporate Governance

Internal Audit

The company's internal audit is an independent unit that reports directly to the board of directors. In addition to reports on routine meetings of the board of directors, a report shall also be made to the chairman every month or as required.

 

The internal audit rules clearly provide that an internal audit shall perform internal control over the company's operating procedure, issue reports about the design of such control, whether routine practice is appropriate and the result and efficiency. The scope covers all activities of the company as well as its subsidiaries.

 

The main task of an audit is to execute the audit plan approved by the board of directors. This audit plan has been established based on identified risks and requires project audit or review in accordance with needs. Combining the above general audit and project execution will provide the management with the status of internal control function and operation, and provides management with another channel to timely understand existing or potential efficiencies.

 

The internal audit reviews the self inspection performed by each department, including verifying whether such procedures have been executed and reviewing documents to ensure the quality of execution. The self inspection results will be consolidated and reported to the board of directors.

 

The internal audit unit of the Acter consisted of 3 auditors that including 1 supervisor. The appointment or dismissal of the chief internal auditor is approved by the audit committee and is submitted to the board of directors for a resolution; the appointment, dismissal, evaluation and review, salary and compensation of internal auditors shall be submitted to the relevant supervisor or chairman of the board for processing in accordance with the company's approval authority.

Communications of Independent Directors with Internal Auditor and CPAs

 

The company established an audit committee, which is composed of all independent directors. The company's internal auditor shall faithfully implement the annual audit plans and submit the audit report to the independent directors. If there is any doubt or instruction, independent director will inquire or inform the internal auditor through electronic communication. This procedure provides independent directors with sufficient overview of the company's internal audit and internal control. The company's chief internal auditor also regularly presents internal audit reports at the audit committee meetings. If there is any special circumstance, the chief internal auditor will immediately notify the audit committee. The company holds a Closed door meeting between the chief internal auditor and the independent directors at least once a year. The communication mechanism between the independent directors and the chief internal auditor works well and effectively.

Communication matters between the company's chief internal auditor and the independent directors

Date Communication matters Execution results
Jan. 22, 2022   
Closed-door Meeting
  1. Audit implementation and tracking status in the fourth quarter of 2021
  2. 2021 self-assessment of the internal control system
  3. 2022 Annual work plan
  1. No comments
Feb. 24, 2022   
Audit committee
  1. Internal audit activities report (2021/10~2021/12)
  2. 2021 Statement of the internal control system
  1. No comments. Submit to the board of directors after approval
May 06, 2022   
Audit committee
  1. Internal audit activities report (2022/01~2022/03)
  2. To amend the company’s “Information Cycle.”
  1. No comments. Submit to the board of directors after approval
Aug. 05, 2022   
Audit committee
  1. Internal audit activities report (2022/04~2022/06)
  1. No comments
Nov. 04, 2022   
Audit committee
  1. Internal audit activities report (2022/07~2022/09)
  2. 2023 Annual audit plans
  1. No comments. Submit to the board of directors after approval
Aug. 02, 2022 Communication via e-mail or phone call
  1. What is the audit unit’s organization and responsibility related to the supervision of subsidiaries? How often and how is the supervision of subsidiaries inspected?
  1. The company and its subsidiaries that are public companies have allocated qualified and appropriate number of internal auditors.
  2. The audit unit of the subsidiary submits the “audit report” to the auditing office of the ultimate parent company for review every month in accordance with laws and regulations.
  3. Subsidiary supervision is divided into planned audit (according to the annual audit plans) and special audit (selected according to the nature of business and management needs or according to the instructions of the company’s executive)
  4. Through the internal control self-assessment, the effectiveness of the design and implementation of the group’s internal control system is measured to implement the self-monitoring mechanism.
  5. In response to legal regulations and company management needs, coordinate and solve process or operational problems among the various units of the group, and propose proposals.
Date Communication matters Execution results
Feb. 25, 2021   
Audit committee
  1. Internal audit activities report (2020/10~2020/012)
  2. 2020 Statement of the internal control system
  1. No comments. Submit to the board of directors after approval
May 06, 2021   
Audit committee
  1. Internal audit activities report (2021/01~2021/03)
  1. No comments.
Aug. 05, 2021   
Audit committee
  1. Internal audit activities report (2021/04~2021/06)
  1. No comments. Submit to the board of directors after approval
Nov. 06, 2021   
Audit committee
  1. Internal audit activities report (2021/07~2021/09)
  2. 2022 Annual audit plans
  1. No comments. Submit to the board of directors after approval
Aug. 04, 2021 Communication via e-mail or phone call
  1. What is the basis and scope of the amendment of Internal Audit Implementation Rules?
  2. The Internal Audit Implementation Rules specified the responsibilities of auditors are to compare and analyze the operating performance of the company, review the operating results, and take effective countermeasures to improve operating efficiency. However, reviewing the operating results and taking effective countermeasures should be the responsibility of the “managerial officers,” and it is recommended to revise the statement of this article.
  1. The Rules is amended with reference to the control directions of each operating activity of the internal control system, and is the basis for the implementation of audit.
  2. In practice, the audit unit regularly provides “performance index details” before the meeting for the managerial officers to refer to, as a reference for their countermeasure implementation and improvement. Therefore, the content is amended to “Compare and analyze the company’s operating performance indicators for each unit to review operating results and take effective countermeasures.”
Nov. 01, 2021 Communication via e-mail or phone call
  1. Whether climate risk should be included in the risk assessment scale? Because there is a global consensus on the topic of climate crisis, in the ESG annual report, climate risk is an essential item that must be disclosed, and major factories such as TSMC have required third-party manufacturers to save energy by 20%. It has become an operation-related risk that manufacturers must face. If they fail to meet the standard, they will be disqualified as a supplier. In the initial stage, it may only be for the manufacturing industry. Sooner or later, the service industry will also be included.
    It is suggested that Acter can also incorporate this risk management into its normative projects. Homeopathically review the current and follow-up energy use status, including self-use (electricity and oil used by offices or subsidiaries, etc.) or providing customer (energy efficiency of projects), formulate regulations of energy conservation, carbon reduction and environmental protection, as an internal basis for the company to follow and cope with the next wave of ESG.
  1. The environmental protection issue has been disclosed in the CSR report, and the TCFD framework is used to identify climate risks and opportunities. Measurement indicators and target management has been established based on the identification results.
  2. The quality insurance & safety department is the management unit, responsible for promoting the ISO 14001. In accordance with PDCA, a systematic management method was set up to maintain the consistency of environmental protection goals and implementation strategies, and to establish pollution prevention and improvement mechanisms. At the same time, promote ISO 50001 to improve energy and resource efficiency.
  3. The general administration division regularly reports on climate change results to the board of directors.
Date Communication matters Execution results
Feb. 27, 2020   
Audit committee
  1. Internal audit activities report (2019/10~2020/01)
  2. 2019 Statement of the internal control system
  1. No comments. Submit to the board of directors after approval
May 07, 2020   
Audit committee
  1. Internal audit activities report (2020/02~2020/03)
  1. No comments.
Aug. 05, 2020   
Audit committee
  1. Internal audit activities report (2020/04~2020/06)
  1. No comments. Submit to the board of directors after approval
Nov. 06, 2020   
Audit committee
  1. Internal audit activities report (2020/07~2020/09)
  2. 2021 Annual audit plans
  1. No comments. Submit to the board of directors after approval
Date Communication matters Execution results
Feb. 26, 2019   
Audit committee
  1. Internal audit activities report (2018/10~2019/01)
  2. 2018 Statement of the internal control system
  1. No comments.
May 09, 2019   
Audit committee
  1. Internal audit activities report (2019/02~2019/03)
  1. No comments.
Aug. 12, 2019   
Audit committee
  1. Internal audit activities report (2019/04~2019/06)
  1. No comments.
Nov. 08, 2019   
Audit committee
  1. Internal audit activities report (2019/07~2019/09)
  2. 2020 Annual audit plans
  1. No comments.
Date Communication matters Execution results
Feb. 23, 2018   
Audit committee
  1. Internal audit activities report (2017/10~2017/12)
  2. 2017 Statement of the internal control system
  1. No comments.
May 10, 2018   
Audit committee
  1. Internal audit activities report (2018/01~2018/03)
  1. No comments.
Aug. 09, 2018   
Audit committee
  1. Internal audit activities report (2018/04~2018/06)
  1. No comments.
Nov. 09, 2018   
Audit committee
  1. Internal audit activities report (2018/07~2018/09)
  2. 2019 Annual audit plans
  1. No comments.
Date Communication matters
Feb. 23, 2017   
Audit committee		 Internal audit activities report (2016/10~2017/01)
2016 Statement of the internal control system
May 11, 2017  
Audit committee		 Internal audit activities report (2017/02~2017/03)
Aug. 10, 2017  
Audit committee		 Internal audit activities report (2017/04~2017/06)
Nov. 09, 2017  
Audit committee		 Internal audit activities report (2017/07~2017/10)
2018 Annual audit plans
Date Communication matters
Feb. 25, 2016   
Audit committee		 Internal audit activities report (2015/10~2016/01)
2015 Statement of the internal control system
May 11, 2016  
Audit committee		 Internal audit activities report (2016/02~2016/03)
Aug. 10, 2016  
Audit committee		 Internal audit activities report (2016/04~2016/06)
Nov. 08, 2016  
Audit committee		 Internal audit activities report (2016/07~2016/09)
2017 Annual audit plans
Date Communication matters
Jan. 23, 2015  
Audit committee		 Internal audit activities report (2014/11~2014/12)
Feb. 26, 2015  
Audit committee		 Internal audit activities report (2014/12~2015/01)
2014 Statement of the internal control system
Apr. 28, 2015  
Audit committee		 Internal audit activities report (2015/02~2015/03)
Jul. 30, 2015  
Audit committee		 Internal audit activities report (2015/03~2015/06)
Nov. 10, 2015  
Audit committee		 Internal audit activities report (2015/07~2015/09)
2016 Annual audit plans

Communication matters between CPAs and the independent directors

 

The CPAs report matters relating to the annual or semi-annual audited (reviewed) financial statements to the audit committee meeting. In the meetings, independent directors are given sufficient opportunities to communicate with the CPAs. In addition, the CPAs also discuss and communicate with the company's governing unit and the independent directors on Key Audit Matters of the financial report. On the other hands, the company holds a Closed door meeting between the CPAs and the independent directors at least once a year. The most recent annual communication matters between the CPAs and the independent directors are as follows:

Date Communication matters Comments
2023/01/13 Closed door meeting between the CPAs and the independent directors No comments
2023/01/13 2022 Key Audit Matters of the financial report No comments
2023/02/24 Consolidated financial reports of 2022 No comments
2023/05/10 Consolidated financial statements for three months ended March 31, 2023 No comments
2023/08/10 Consolidated financial statements for six months ended June 30, 2023 No comments
2023/11/08 Consolidated financial statements for nine months ended September 30, 2023 No comments


Communication matters over the years