Organization and Operation of Internal Audit Division

Organization of Internal Audit Division:

  1. According to the Organizational Charter of Fubon Financial Holding Company, the Internal Audit Division is directly subsidiary to the board of directors.
  2. A chief auditor (Vice President) system is established with 14 auditors to conduct routine or special audits.
  3. The chief auditor is allowed to, if required by business, dispatch the internal auditors of a subsidiary company to conduct the internal audit task on the financial holding company or the subsidiaries.

Operation of Internal Audit Division:

  1. The draft and execution of annual audit plan:
    • Audit on the financial holding company: one routine audit every six months.
    • Audit on the subsidiaries: one special audit, including finance, risk management, compliance and other important matters, every six months.
  2. Report to the board of directors and audit committee:
    • Regular report of audit business to the audit committee and the board of directors.
    • Submission of a written report to the audit committee and the board of directors on the implementation of improvement of audit deficiencies brought up by the financial examination authority, CPA and internal audit, and on matters specified in the internal control system statement for stronger improvement efforts.
  3. Monitoring self-inspection of the internal control system:
    • Monitoring the formulation of procedures for self-inspection of the internal control system by business and management units.
    • Conducting self-inspection once a year at least, and monitoring and reviewing the Implementation of self-inspection by each unit of the financial holding company.
    • Submission of the internal control system statement to the board of directors for approval, and disclosure of the information contained therein on the company website and publication on a website designated by the competent authority within three months from the end of each fiscal year.
  4. Evaluation of the efficacy of the internal audit activities of the subsidiaries:

    Periodical evaluation of the efficacy of the internal audit activities of the subsidiaries and sending the evaluation results to the relevant subsidiary's board of directors for their reference in personnel evaluations.

  5. Review of documents submitted by the subsidiaries:

    Reviewing the audit plans and reports on significant deficiencies identified in internal audit reports and the status of improvements thereof, CPA audit reports, and examination reports issued by the financial examination agency, submitted by the subsidiaries and monitoring the implementation of improvements by the subsidiaries.

  6. Follow-up and monitoring of audit deficiencies:

    Continual conduct of follow-up reviews on any audit deficiencies brought up by the financial examination authority, CPA and internal audit, and on matters specified in the internal control system statement as requiring stronger improvement efforts.