Internal auditing

Internal auditing

Wistron corporation has established an independent auditing office with direct reporting to the Board of Directors. The Board of Directors' Audit Committee was setup under the Board by all independent directors. Besides reporting to the Board of Directors during Board meetings, the Audit Office head briefs the Chairman and the Audit Committee on a needed basis.

Organization of audit office

• Wistron has allocated professional audit personnel to the Audit Office, with a total of 8 individuals including the chief auditor and the audit team members.

Scope of audit work

The internal Audit office reviews the suitability of the internal control system and ensure the implementation of general operations according to the “Internal Auditing Enforcement Rules”. The unit conducts continuous and project based audits, which cover all internal operations and subsidiaries of the Company.

Responsibilities of audit work

With highly rated senior staff, the auditing office aims beyond fraud detection and prevention. The auditing office is expected to contribute to Wistron's overall value, and the stakeholders will benefit through this continuous improvement cycle. Through business risk assessments the auditing office helps the company to identify weak points in business processes and coordinates the allocation of resources requires for process improvements.

The practices of audit work

The Audit Office conducts an audit plan at the end of each year using a risk-assessment method based on the global and regional economic/political situation and the findings of previous auditing in order to identify the audit focus in coming year. The annual audit plan must be reviewed by Audit Committee and then approved by the Board of Directors.

Audit reports in written format are mandated to issue for the review of independent directors on monthly basis and further communications is conducted via emails/phone calls as needed, and the summary is prepared for communication with top executives and then reported to the Board each quarter. Any revised audit plan, due to changed circumstances, needs to be approved by the Board of Directors.

External auditors from CPA firms are invited to have face-to-face communication with independent directors, the CFO, and the Audit Office head at quarterly meetings of the Audit Committee. If necessary, other department heads will be invited as well. The conclusions are presented together with the audit reports in the Board meeting, any instruction made by the Board will be followed up by auditing office.

Self-assessment on internal control

Wistron's internal control system is designed by the management in accordance with the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" in consideration of the Company's overall business activities and approved by the Board of Directors. The internal control system includes constituent elements and key control points for sound operations to reasonably ensure that the following objectives are achieved:

1. Effectiveness and efficiency of operations.
2. Reliability, timeliness, transparency, and regulatory compliance of reporting.
3. Compliance with applicable laws, regulations, and bylaws.

The internal control self-assessment is conducted on a digital platform. The President supervises internal units and subsidiaries which are required to perform at least one internal control self-assessment each year. The Audit office reviews the self-assessment reports of all units and subsidiaries and uses the internal control discrepancies and irregularities found by the Audit office in the past as the basis for the Chairman and President's evaluation of the effectiveness of the overall internal control system and the preparation of the Internal Control System Statement. Wistron did not discover major internal deficiencies in 2022.

Audit on subsidiaries

Considering the local regulations and the operational complexity of each subsidiary, it is the company policy to have each subsidiary defining the internal control required by its operations. Audit office will conduct periodical auditing on the subsidiaries based on the risk assessment, and the auditor shall communicate with the related departments for the issues identified in the auditing and make sure that proper countermeasures are implemented.