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Article 11
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A public company shall establish an internal audit unit under the board of directors, and shall appoint, according to its business size, business condition, management needs, and the provisions of other applicable laws and regulations, qualified persons in an appropriate number as full-time internal auditors and have deputies in place for the internal auditors. The deputies are required to carry out audit work in accordance with these Regulations.
Any appointment or dismissal of chief internal auditor of a public company shall be subject to approval by the board of directors. Where a public company has established the position of independent director, if an independent director objects to or expresses reservations about the appointment or dismissal, it shall be recorded in the minutes of the board of directors meeting. .
Where a public company has established an audit committee, any appointment or dismissal of the chief internal auditor shall be subject to approval by the audit committee and be submitted to the board of directors for a resolution, in which case Article 4, paragraph 4 shall apply mutatis mutandis.
When there is a change in the chief internal auditor of a public company, the company shall report the change and the reasons for it within 2 days counting inclusively from the date of occurrence via the Internet-based information system to the FSC for recordation.
The date of occurrence referred to in the preceding paragraph means the date of the resolution by the board of directors, or other date sufficient to determine the appointment or dismissal of the chief internal auditor, whichever comes first.
The requirements for the qualified full-time internal auditors referred to in paragraph 1 shall be as prescribed separately by the FSC.
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Article 16
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The internal auditors of a public company shall be detached, independent, objective, and impartial, in faithfully performing their duties, and shall exercise due professional care, and in addition to reporting their audit operations to each supervisor on a regular basis, the internal audit officer shall also attend and deliver a report to a board of directors meeting.
The internal auditors shall perform their duties in good faith and shall not do any of the following:
- Conceal or make false or inappropriate disclosure of any the company's business activities, reporting, or compliance with applicable laws, regulations, and bylaws, knowing that they have caused direct damage to an interested party;
- Damage any right or interest of the company or any interested party through neglect of duty;
- Act beyond the scope of audit functions or engage in other improper activity, with the intent to gain illegal benefit for him/herself or a third party, violate the auditor’s duties or embezzle company assets.
- Conduct an audit on a department where he/she worked within the past 1 year.
- Fail to recuse him/herself from auditing of cases in which he or she has a personal interest or has a conflict of interest.
- Fail to audit any matter as instructed by the FSC or provide relevant information; or
- Provide, promise, request, or accept, directly or indirectly, unreasonable gifts, entertainment, or any other improper benefits in whatever form.
- Any other activity in violation of any act or regulation or prohibited by any rule of the FSC.
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Article 17
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The internal auditors of a public company shall pursue continuing education as well as attend internal audit training held by institutions recognized by the FSC, to improve their auditing quality and competence.
The internal audit training referred to in the preceding paragraph shall include the various professional courses, computerized auditing, and basic legal knowledge.
The hours required for the continuing education under paragraph 1 shall be as prescribed separately by the FSC.
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Article 18
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A public company shall report to the FSC for recordation the names, ages, educational background, experience, seniority, and training of its internal auditors by the end of January each year via the Internet-based information system.
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