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Article 8
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In addition to control activities for different types of operating cycles as set out in the preceding article, a public company shall include controls for the activities listed below in its internal control systems:
1. Management of the use of seals.
2. Management of the receipt and use of negotiable instruments.
3. Management of the budget.
4. Management of assets.
5. Management of endorsements and guarantees.
6. Management of liabilities, commitments, and contingencies.
7. Implementation of authorization and deputy systems.
8. Management of loans to others.
9. Management of financial and non-financial information.
10. Management of related party transactions.
11. Management of the procedures for preparation of financial statements, including management of application of International Financial Reporting Standards, procedures for professional accounting judgments, and processes for making changes in accounting policies and estimates.
12. Supervision and management of subsidiaries.
13. Management of operation of board meetings.
14. Management of shareholder services.
15. Management of personal information protection.
The internal control system of a public company that has established an audit committee shall include the management of audit committee meeting operations.
The internal control system of a company whose stock is exchange-listed or traded over the counter shall also include controls over the following operations:
1. Management of the operations of the remuneration committee.
2. Management of the prevention of insider trading.
The internal control system of a company whose stock is exchange-listed or traded over the counter shall include the management of sustainability information.
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Article 13
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A public company's internal audit unit shall formulate annual audit plans based on the results of the risk assessment, including matters to be audited monthly, and shall faithfully implement the annual audit plans, so as to assess its internal control systems, and prepare audit reports, annexing working papers and relevant materials.
A public company shall include at least the following as audit items in its annual audit plan for each year:
1. Matters relating to compliance with applicable laws, regulations, and bylaws.
2. The control activities for major financial or business activities, such as for acquiring or disposing of assets, engaging in derivatives transactions, extending loans to others, granting endorsements or guarantees for others, and management of related party transactions.
3. Supervision and management of subsidiaries.
4. Management of operation of board meetings.
5. Management of preparation process of financial statements, including management of application of International Financial Reporting Standards, procedures for professional accounting judgments, and processes for making changes in accounting policies and estimates.
6. Inspection of information and communications security.
7. Major operating cycles such as the sale and receipt cycle and purchase and payment cycle.
The annual audit plan of a public company that has established an audit committee shall also include the management of audit committee meeting operations.
Each annual audit plan of a company whose stock is exchange-listed or traded over-the-counter shall also include management of the operations of the remuneration committee.
Each annual audit plan of a company whose stock is exchange-listed or traded over the counter shall include the management of sustainability information.
A public company's annual audit plan, and any amendments thereto, shall be passed by the board of directors.
Where a public company has established independent director position(s), when it submits the annual audit plan to the board of directors for deliberation under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions, and shall include their opinions in the board meeting minutes.
The audit report referred to in paragraph 1, the working papers, and relevant information referred to therein shall be preserved for no less than 5 years.
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Article 39
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A public company shall execute at least the following control activities when supervising and managing its subsidiaries' business management:
1. Establish an adequate organizational control structure between it and each subsidiary, including the election of, the assignment of authority and responsibility to, and the remuneration policy and system for the subsidiary's directors, supervisors, and high-level managers.
2. Set out overall business strategies, risk management policies, and guidelines applicable to it and its subsidiaries, as a basis for each subsidiary to map out business plan and risk management policies and procedures for relevant business operations.
3. Set forth policies and procedures applicable to it and each subsidiary in relation to business segmentation, liaison regarding order placement, materials preparation methods, inventory allocation, conditions for accounts receivable and accounts payable, and account processing.
4. Set forth policies and procedures for supervising each subsidiary's material financial and business matters such as business plan and budget, material investment and reinvestment in equipment, borrowings and debt, lending of funds to others, endorsement/guarantees, obligations and commitments, investment in securities and derivatives, important contracts, major changes in assets, and management of the adoption of the International Financial Reporting Standards (IFRSs), the accounting professional judgment process, and the process for changes in accounting policies and accounting estimates.
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Article 47
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These Regulations shall come into force from 1 January 2015.
The amendments to these Regulations shall be enforced from the date of issuance, with the exception of the articles amended on 15 December 2022, which shall come into force from 1 January 2023, and Article 8, paragraph 4 and Article 13, paragraph 5 amended on 22 April 2024, which shall come into force from 1 January 2025.
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