Communications between the independent directors, the Company’s chief internal auditor and CPAs
SYSTEX’s Audit Committee shall be solely composed of Independent Directors and meetings shall be convened at least once a quarter. Ad-hoc meetings shall be held whenever necessary.
Communication between the chief internal auditor and the Audit Committee
- Periodic: Report the findings in audits and the status of improvement on irregularities to the Audit Committee; respond to all questions submitted by the Independent Directors, and enhance the contents of auditing tasks in accordance with their instructions to ensure the effectiveness of the internal control system.
- Non-periodic: Use telephone, email, or face-to-face communication to communicate discoveries in the audits and how to continuously increase the value of audits. In the event of material violation, the Independent Directors shall be notified immediately.
- Summaries of communication in 2023:
|
Date |
Communication Content |
Results |
|
Audit Committee |
The implementation of audit program from January to February, 2023. |
Noticed. |
|
The amended the Internal Control System. |
Approved and referred to the Board. |
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The” Statement of Internal Control System” for 2022. |
Approved and referred to the Board. |
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Audit Committee |
The implementation of audit program in March, 2023. |
Noticed. |
|
The amended the Internal Control System. |
Approved and referred to the Board. |
|
|
Audit Committee |
The implementation of audit program in April, 2023. |
Noticed. |
|
The amended the Internal Control System. |
Approved and referred to the Board. |
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|
Audit Committee |
The implementation of audit program from May to July, 2023. |
Noticed. |
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The amended the Internal Control System. |
Approved and referred to the Board. |
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Symposium on November 1, 2023 |
Audit digital transformation and development. |
Make good use of digital tools and expand their use in sales, purchasing, payment status, etc. |
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ESG and IFRS sustainable disclosure standard blueprint. |
Revise the internal control system and include it in the annual audit plan in accordance with the timetable specified by the competent authority. |
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Results of the actual review of the internal control system of the Taiwan Stock Exchange. |
Handle in accordance with the review opinions of the competent authority. |
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Audit Committee |
The implementation of audit program from August to September, 2023. |
Noticed. |
|
Audit Committee |
The implementation of audit program from October to December, 2023. |
Noticed. |
|
The Audit program for 2024. |
Approved and referred to the Board. |
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|
The amended the Internal Control System. |
Approved and referred to the Board. |
Communication between the CPAs and the Audit Committee
- Periodic: The CPAs shall communicate with the Audit Committee on the audit plan, execution status, and results in the periods before and after the semi-annual and annual audit reports.
- Non-periodic: Meetings may be arranged in the event that operations or internal controls require immediate communication on related cases.
- Summaries of communication in 2023:
|
Date |
Item |
Communication Content |
Results |
|
February 22, 2023 |
Financial Statement for Year 2022 |
Consolidated and Unconsolidated Financial Statements for Year 2022 |
Report the audited adjustments of Year 2022 Financial Statement. |
|
Key audit items |
The impairment evaluation for accounts receivable were the key audit items in 2022. |
The most important items of Systex Group’s 2022 Consolidated Financial Statements as per the professional judgment of the CPA. |
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Pre-Approval of Non-Assurance Services by the Company’s Governance Unit |
New regulations under the International Code of Ethics for Professional Accountants, effective December 15, 2021, require listed, over-the-counter, and other public interest entities, including their global alliance member firms, to provide non-assurance services. The parent company with control over the company and its consolidated entities must conduct an independence assessment for non-assurance services, and communicate with and obtain pre-approval from the company’s governance unit. |
The Company will develop procedures for conducting non-assurance service reviews to facilitate compliance by the audit committee. This includes performing independence assessments for non-assurance services and communicating with and obtaining pre-approval from the Company’s governance unit. |
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Application of FSC’s Audit Quality Indicators |
The FSC is promoting audit quality transparency by introducing audit quality indicators. Accounting firms undertaking audit engagements for the financial reports of listed and OTC companies for the year 2023 will provide Audit Quality Indicator (AQI) information for the reference of governance units. |
The AQI information provided by accounting firms includes the following dimensions: 1. Professionalism, 2. Quality Control, 3. Independence, 4. Supervision, and 5. Innovation Capability. This information will be reported to the Audit Committee. |
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August 2, 2023 |
Financial Statements for the Second Quarter Ended of 2023 |
Consolidated Financial Statements for the Second Quarter Ended of 2023. |
Report the adjustments of financial statements for the Second Quarter Ended of 2023. We discuss and communicate the newly-announced “Statements on Auditing Standards” and the amendment of decree. |
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Application of Article 43-3, Income Tax Act: CFC |
The CFC tax regime will be implemented starting from 2023. The Company should continue to monitor the relevant regulations issued by the competent authorities and estimate the appropriate income tax impact on its financial statements. |
Starting from 2023, the parent company will estimate the income tax for Controlled Foreign Companies (CFCs) on a quarterly basis. |
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Reporting of Deferred Taxation of Restricted Share Awards for Future Reference |
According to Article 19-1, Paragraph 7 of the Statute for Industrial Innovation, companies issuing stock-based compensation to employees shall, in the year when employees acquire the stocks or on the date when the stocks become transferable, fill out the required forms specifying the deferred taxation conditions chosen by the employees and other relevant details, and submit them to the central authority in charge of relevant enterprises for future reference. |
In accordance with Articles 3-5 of the Enforcement Rules of the Statute for Industrial Innovation, if employees of the company are subject to the provisions of Article 19-1 of this Act, the company shall, by the end of January of the following year after granting stock-based compensation to employees, prepare the relevant deferred taxation documents in the prescribed format and submit them to the central authority in charge of relevant enterprises for future reference. Copies of these documents will also be provided to the local tax authorities where the company is located. |