THC has set up the independent Auditing Office under the organization of the Board of Directors and established the internal control system following the “Regulations Governing Establishment of Internal Control Systems by Public Companies,” including the “Internal Audit Implementation Rules” approved by the Board. The Auditing Office formulates annual audit plans and items based on the risk assessment. For the inspection result, the internal auditors communicate with the inspected unit, raise improvement suggestions, and track the improvement results. Any defects and irregularities in the internal control systems will disclose in the audit report.
THC’s Chief Auditor periodically delivers a report of the communication status to independent directors in Board meetings and presents internal audit operations reports. In addition, the Chief Auditor will immediately report to independent directors any material matters. During 2022, the Chief Auditor did not report any such material matters. The communication status between independent directors and the Chief Auditor functioned well. The Chief Auditor also continues to follow up on the requests and recommendations from the independent directors (the Audit Committee) and the Board of Directors for internal audits, completing and reporting them within a specified time limit.
Implementation Status of Preventing Insider Trading
The Auditing Office periodically supervises that all internal departments and subsidiaries conduct self-assessments. The internal auditors formulate the self-evaluation checklist base on the guidelines of internal control systems. Every unit first conducts self- inspection based on different aspects such as production, sales, human resource, development, and finance, and then the internal auditors check whether every unit has faithfully carried out auditing operations by the procedures. In this way, internal auditors strengthen the second and third lines of internal control and improve audit efficiency and effectiveness.
There are 61 audit items in 2022, with 100% compliance rate.
The Annual Internal Audit Procedure