Communications between the independent directors, the Company’s chief internal auditor and CPAs
- The Company’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 2021:
|
Date |
Communication Content |
Results |
|
Audit Committee on February 24, 2021 |
The implementation of audit program from January to February, 2021. |
Noticed. |
|
The” Statement of Internal Control System” for 2020. |
Approved and referred to the Board. |
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Audit Committee on April 14, 2021 |
The implementation of audit program in March, 2021. |
Noticed. |
|
The amended the Internal Control System |
Approved and referred to the Board. |
|
|
Audit Committee on May 5, 2021 |
The implementation of audit program in April, 2021. |
Noticed. |
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Audit Committee on August 4, 2021 |
The implementation of audit program from May to July, 2021. |
Noticed. |
|
Audit Committee on November 2, 2021 |
The implementation of audit program from August to September, 2021. |
Noticed. |
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Audit Committee on December 22, 2021 |
The implementation of audit program from October to December, 2021. |
Noticed. |
|
The Audit program for 2022. |
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 2021:
|
Date |
Item |
Communication Content |
Results |
|
February 24, 2021 |
Financial Statement for Year 2020 |
Consolidated and Unconsolidated Financial Statements for Year 2020 |
Report the audited adjustments of Year 2020 Financial Statement. We discuss and communicate the applicability of certain accounting principles. |
|
Key audit items |
The impairment evaluation for accounts receivable were the key audit items in 2020. |
The most important items of Systex Group’s 2020 Consolidated Financial Statements as per the professional judgment of the CPA. |
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Intangible assets impairment assessment |
Because of the characteristics of IT industry and the short product cycle, it is recommended that the company continuously evaluate the use efficiency of intangible assets. If there is any impairment, the impairment loss should be reported in the financial statements in timely. |
The company regularly inspects and evaluates the intangible assets for its own use. If there is any impairment, the impairment loss can be reflected in the financial statements in timely. |
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Purchasing Management of Software |
In 2019 and 2020, the subsidiary Systex Software & Service Corp. recognized the loss of inventory impairment, which was mainly due to the amount of software stocking that OO Company had not announced for bidding. |
The company has re-examined the internal control related to the purchase of software from the original factory to ensure that the internal control procedures for procurement are sufficient to comply with the original factory regulations and control the risk of inventory loss. |
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Statute Update – Corporate Governance 3.0 |
According to the scale of the capital, the FSC will promote listed companies to publish the annual financial information since the end of the year and shorten the period for the announcement of the annual financial report after the audit. Since 2023, the company must announce the financial information of the 2022 since the end of the year within 75 days after the end of the year. |
The company will cooperate with Corporate Governance 3.0 to shorten the reporting period for the annual financial report announcement after the audit, and the self-closing financial report from 2022 will be announced within 75 days after the end of the year. |
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In 2021, the “quarterly financial statements are approved by the audit committee” as indicator of corporate governance evaluation of listed companies. |
The company has begun the first quarter of 2021 to submit quarterly financial statements to the audit committee for approval. |
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August 4, 2021 |
Financial Statements for the Second Quarter Ended June 30, 2021 |
Consolidated Financial Statements for the Second Quarter Ended of 2021. |
Report the adjustments of financial statements for the Second Quarter Ended of 2021. We discuss and communicate the newly-announced “Statements on Auditing Standards” and the amendment of decree. |
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Investments accounted for using equity method |
SYSTEX Group will continue to increase its investment in XX Company in 2021. In March 2021, the cumulative investment has exceeded 20%, and it has been transferred to the investment using the equity method. It is recommended that the company establish a communication channel with it as soon as possible to ensure the correctness of investment evaluation. |
The company has coordinated with OO company to provide self-closing financial statements to the company after the monthly closing and the next month’s revenue announcement. |