1. Internal Audit Department
Hua Nan Financial Holdings has set up an Internal Audit Department under the Board of Directors. The Department, which engages in audit-related operations, headed by Chief Internal Auditor and a number of auditors (presently six).
Based on operational needs, the Chief Internal Auditor may transfer auditors among Group subsidiaries to carry out internal audit for Hua Nan Financial Holdings and its subsidiaries.
2. Internal Audit Operation
(1) Periodic Audits
1. An audit of all of the Company’s regular business is carried out at least once per year.
2. Financials, risk management and legal compliance audits are carried out at least once every six months at the FHC and all subsidiaries. Units in which no major shortcomings are discovered are exempt from being audited again within six months.
3. The audit reports for the subsidiaries are reviewed by the Department under the Board of Directors, which also oversees initiatives to rectify any shortcomings.
(2) Random Audits
Banking regulatory agencies, certifying accountants and the Departement will provide opinions and suggestions with respect to the audits they carry out on the FHC and its subsidiaries. In addition, specific areas designated for improvement will be indicated in the Declaration of Internal Controls. The Department will monitor efforts made by respective units to rectify any problems cited.
(3) Reports to the Board of Directors and Audit Committee
1. The Department periodically reports to The Board of Directors and Audit Committee on the result of findings.
2. The Department will provide written reports to the Board of Directors and Audit Committee on opinions and suggestions made by banking regulatory agencies, certifying accountants and the Department with respect to the audits they carry out, as well as areas designated for improvement in the Declaration of Internal Controls.