Internal audit is the core of a company's internal control systems and corporate governance. In an effort to improve the quality of internal audit and to ensure that the internal auditing department is capable of obeying the rules governing internal audit practices and defined internal audit operational standards, we have formulated the sound internal audit regulations and rules as below:
Internal audit charter of Chunghwa Telecom Co., Ltd.: clearly define to observe international standards for the professional practice of internal auditing while conducting audits, and specify the internal audit organization and duties, qualifying requirements for internal auditors, professional ethics and professionalism, etc.
Internal audit implementation rules of Chunghwa Telecom Co., Ltd.: specify internal auditors’ normative duties and matters for attention while conducting audits, making internal auditing plans, executing internal auditing operation, disposing internal auditing results, etc.
Internal audit operational manual of Chunghwa Telecom Co., Ltd.: including the detailed procedures and content of internal auditing operation, various application forms, and working methods, as the reference while auditors conducting their audits.
Moreover, we have established “the management information system of internal audit”, which includes annual audit plan, auditing jobs assignment, auditing notification, the data to prepare, auditing inquiry form and inquiry form reply, audit working papers, audit reports, auditing follow-up form and follow-up form reply, auditing follow-up report, the implementation of annual audit plan, etc. The system also possesses a number of statistical analysis functions.
We have an internal audit unit that reports directly to the board of directors. The audit unit conducts internal audits strictly in accordance with policies in the utmost objectivity. It assists the board of directors and managers by constantly reviewing the effectiveness of internal control systems and operating efficiency.
The Highest Moral Standard
We have set up the “Code of Ethics of Chunghwa Telecom Co Ltd,” “Ethical Corporate Management Best Practice Principle,” and “Procedures for Ethical Management and Guidelines for Conduct.” These are formulated as a basic ethical guideline to ensure that all employees engage in all activities with the highest standard. In addition to these codes being included in the training program for new hires, all employees are required to log into the web, review the material and take a test annually. A hotline was set to encourage employees to voice opinions safely and confidentially. All employees participated in the test in 2019 except for those who were not available for a legitimate reason at the time of the test.
There was a total of 18 cases associated with violation of the codes of conduct in 2019. All cases were investigated and handled according to company internal policies and principles, and taught as case studies to strengthen employee esteem for the rules, discipline, corporate image, and shareholders’ interests. We have passed and obtained the CoC from SGS Taiwan, which verifies the effectiveness of the implementation and reporting mechanism of CoC system in Chunghwa Telecom.