Internal Audit

To ensure operational effectiveness and efficiency, the reliability, timeliness, and transparency of reporting, compliance with relevant regulations, and adherence to laws and rules, BenQ Materials Corporation has established, implemented, and maintained an internal control system in accordance with the "Regulations Governing Establishment of Internal Control Systems by Public Companies" issued by the Financial Supervisory Commission (FSC).

The Audit Office is staffed with competent and appropriate personnel and is directly under the Board of Directors. The appointment, evaluation, and remuneration of internal audit personnel are governed by the "Corporate Governance Best Practice Principles," the "Audit Committee Charter," and the "Rules of Procedure for Board of Directors Meetings." The appointment or dismissal of the chief internal auditor must be reported to the Audit Committee and the Board of Directors. Furthermore, the "Approval Authority Table" specifies that the chairman approves the remuneration and bonuses of the audit supervisor.

The Audit Office prepares an annual audit plan, which is approved by the Board of Directors. It conducts audits on various operational areas and provides recommendations for improvement. Audit reports are signed by the chairman and submitted to independent directors for review. The execution of these reports is presented to the Audit Committee and the Board of Directors, supporting the Board and management in fulfilling their responsibilities for internal control and risk management.

Annual Audit Focus:

1. Mandatory Audits as Required by the FSC
   These include audits of compliance with laws and regulations, asset acquisitions or disposals, derivative financial transactions, loans to others, endorsements or guarantees, management of related party transactions, supervision and management of subsidiaries, Board meeting operations, information security, sales and collections cycle, procurement and payment cycle, financial statement preparation process, operations of the Compensation Committee, and operations of the Audit Committee.
2. Risk-Based Audits
   In addition to the mandatory items, selected operational cycles and control activities are included in the annual audit plan based on risk assessments. Internal units and subsidiaries are required to perform self-assessments, which are reviewed to evaluate the design and execution effectiveness of the internal control system.