Internal Control and Internal Audit
The Board of Directors recognizes the importance of an internal control system, and has installed an internal control system that governs the financial, management and operational aspects for greater effectiveness and efficiency, in accordance with related laws and regulations, while emphasizing continuous improvement according to COSO (The Committee of Sponsoring Organizations of the Treadway Commission). The Board has set clearly written guidelines of duties and authorities for the management, as well as laying down controls and ways that the Company’s assets can be used to generate the greatest benefits. To serve as checks and balances, the roles and duties of front-line operators, supervisors and evaluators are also clearly delineated. In addition, the Company ensures that there is a financial reporting system to be presented to those in the direct line of responsibility. The Board of Directors has expressed its opinion on the sufficiency of the Company and subsidiaries’ internal control system in Section “Internal Controls”
The Company’s Internal Audit Department is responsible for reviewing the operation systems as well as evaluating the efficiency and sufficiency of the Company and subsidiaries’ internal control system. To ensure that major operations and important financial transactions of the Company and subsidiaries are conducted efficiently and that the policy and objectives set by the management have been fulfilled. The Department also reviews whether the Company abides by relevant laws and regulations. So that the Internal Audit Department remains independent in order to be able to fully assess and perform its duty as a checks and balances, the Board of Directors has stipulated that the Internal Audit Department report directly to the Audit Committee and perform internal audit tasks according to an annual plan approved by the Committee. The Department reports on the results of the review and makes suggestions to the Audit Committee and Chief Executive Officer in a timely and consistent manner.
The Company views the importance of having risk management procedures to minimize internal and external risk factors to a level appropriate and acceptable for the conditions of each business unit by actively encouraging the participation of management and employees at all levels. In 2009, the Board of Directors evaluated and approved the Risk Management Committee Charter, as well as the risk management framework and policies for the Company as proposed by the Risk Management Committee. The Board has reviewed the appointment of a Risk Management Sub- Committee, and the scope of work and responsibilities of this Sub-Committee. The Risk Management Committee will coordinate with the Audit Committee on reporting important risks and solutions to the Board of Directors and the management team. The Risk Committee will also review the risk management policies and framework as necessary and propose to the Board of Directors for approval.
