Wah Hong's Internal Audit System
1. Purpose of the internal audit：
To assist the board of directors and managers in promoting sound operations of the company and reasonably ensuring the objectives listed below are achieved. At the same time, to make timely recommendations for improvements to ensure sustainable operating effectiveness of the internal control system and to provide a basis for review and correction for the system.
2. Wah Hong's Internal Audit function is an independent unit that reports directly to the Board of Directors. Besides informing the Board during its ordinary meetings, it briefs the Audit Committee and Chairman of the board on an as-needed basis. There are three full time employees dedicated to Internal Audit. Appointment, dismissal, evaluation and review, salary and compensation of the internal auditor shall be submitted by the chief auditor to the board chairman for approval.
3. Internal audit System：
3.1. Scope：The scope of Internal Audit includes inspecting and reviewing the appropriateness and the effectiveness of internal controls in the company's processes, and to report on those controls with respect to the adequacy, effectiveness, and efficiency of their design as well as their actual functioning on a day-to-day basis.
3.2. All parts of the company and its subsidiaries are open for review by Internal Audit.
3.3. Audit Work：
3.3.1. The internal audit includes the planning of inspections, the examination and estimation of information, the communication of the result, and the tracking after inspection.
3.3.2. In consideration of the risk, the annual plan of the internal audit should set major inspecting points for each individual case and keep journals of the audit.
3.3.3. After the inspection comes to an end, communicate with the director of the inspected unit regarding the results; when necessary, acquire the improvement plan and the presumed date for completion. The inspecting staff should track the status of the improvement.
3.3.4. The inspection report and the tracking of abnormal issues should be reported to the Supervisors and the independent directors for review.
3.3.5. Internal Audit sees to documented self-assessments by the divisions and all regions, checks that these activities do take place, and reviews the submissions to ensure the quality of the process; it consolidates the results of the self-assessments for the Board of Directors.