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Internal Audit Charter

Mission and Internal Audit Charter
Internal Audit's mission is to review corporate activities as a service to management and the Board of Directors (Board). It is an independent appraisal and evaluation function that measures and evaluates the Company's internal controls and risk management. To this end, Internal Audit will furnish management with analyses, appraisals, recommendations, counsel and information concerning the activities reviewed. All audit responsibilities will be carried out in a manner consistent with the Institute of Internal Auditor's Standards for the Professional Practice of Internal Auditing and Code of Ethics.

The responsibilities of Internal Audit include the following:
Identify corporate activities throughout the Company, at all levels in all organizations, as potential audit subjects. Develop an audit program on an annual basis, and over time, that is sensitive to areas of risk and provides coverage of the audit universe. Ensure that the scope of each audit is sufficient for internal auditing to express an informed opinion about the audit subject.
Ensure that the audit program includes steps to:


Evaluate the adequacy and effectiveness of the Company’s systems of internal controls.
Review the reliability and integrity of financial information and systems and the means used to identify, measure, classify and report such information.
Determine whether or not transactions are executed in accordance with management authorization and recognized and reported in conformity with generally accepted accounting principles.
Evaluate the implications of non-financial audit findings on the Company.
Review the means of safeguarding assets and periodically comparing accounting records with existing assets.
Evaluate the adequacy of methods used to prevent and detect fraud.
Coordinate the scope of the department’s audit activities with that of the independent public accountants. Internal Audit will optimize, where practicable, the effectiveness of time spent by the independent public accountants and other outside auditors.
Perform audits to ensure compliance with policies, plans, procedures, accounting pronouncements, laws and regulations which could have a significant impact upon operations and financial results.
Perform audits which review the development, operations and maintenance functions of systems developed for internal use. Ensure compliance with industry and corporate practices, policies and procedures. Verify the security, accuracy, recoverability and integrity of the company’s networks and data processing controls.
Perform operational reviews and appraise the economy, efficiency and effectiveness with which resources are employed. Determine whether results of operations are consistent with established objectives and are being carried out as planned.
Review audit findings with auditees and issue audit reports to upper management identifying findings and, where applicable, offering recommendations.
Consult with management as requested on various accounting or computer related issues.

In order to fulfill these responsibilities, certain authorities are provided:
The Head of Internal Audit reports to the Audit Committee of the Board with day to day coordination by the Chairman.
The internal auditors possess and retain full, free and unrestricted access to all company activities, information, records, personnel and physical properties relevant to the performance of audits and investigations of fraud or potential fraud.
Internal auditing issues audit reports to senior management. A timely response is required within 30 days from the issuance of the audit report, or sooner as the case may warrant. Any corrective plans or actions to be taken by the organization audited are subsequently evaluated. Significant matters of noncompliance are reported to the Chairman and the Audit Committee.
Internal Audit does not maintain any direct responsibility for operations. Accordingly, decisions as to whether or not corrective actions are to be taken are the responsibility of the organization audited, not Internal Audit.

All audit findings shall be communicated both verbally and in written form to the appropriate section and department heads. Such verbal communication shall ideally take place at the time the findings are confirmed or at the completion of the audit at an exit conference. The factual accuracy of audit findings and related risks are expected to be confirmed by the relevant section or department heads prior to issuance of the draft audit report.

A draft audit report will be issued to the appropriate department heads within 30 days of the completion of fieldwork in order to assure their agreement with the content and language prior to issuance of the final audit report. Respondents to audit observations and recommendations shall return a written response to the Head of Internal Audit within 30 days of the date of issuance of the draft report. The response should specify:
The respondent’s agreement to implement the recommendation(s) or to undertake the alternative course(s) of action which the respondent believes appropriate to correct the deficiency or effect improvement; and,
Designation of the individuals responsible for implementation of the recommendation or alternative course(s) of action and the expected date of implementation.
A signed, written final audit report shall be issued subsequent to the full agreement of the draft audit report by appropriate department heads. Final reports may be issued without a management response or management concurrence when either a written response or concurrence has not been received within 30 days after the date of issuance of the draft audit report. The complete audit report shall be distributed to the appropriate management personnel responsible for the direct or indirect implementation of the recommendations or alternative courses of action believed appropriate to correct the deficiency or effect improvement.

The Head of Internal Audit shall establish procedures governing the proper follow-up of audit reports. These procedures shall involve the requirement for either written or verbal confirmation from auditees that significant Internal Audit recommendations have been addressed or, alternatively, setting out reasons why such agreed upon actions remain outstanding. He shall establish and maintain an action tracking system to identify and monitor the status of outstanding significant audit recommendations and corrective actions.
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