Corporate Governance
Internal Audit
The internal audit of Hushan Industrial Co., Ltd. is a detached and independent department, directly subordinate to the board of directors, and attends the audit committee and the board of directors to submit audit reports. In addition to monthly reporting to the Audit Committee members In addition to reviewing progress and results, reports are also summarized at regular board meetings.
Internal Audit Responsibilities
The Audit Office assists the Board of Directors and executive management in fulfilling their governance responsibilities. Its primary duties include:
- Operations & Control Assessment: Investigating and evaluating the operation, effectiveness, efficiency, and appropriateness of internal control systems.
- Actionable Recommendations: Providing timely recommendations for improvement to ensure the continuous and effective implementation of internal control systems.
Internal audit operations
The Audit Office establishes an independent internal audit system tailored to each department's internal controls, assisting the Board and management in risk oversight and corporate governance. Key responsibilities include:
- Internal Control Review: Reviewing internal controls across all operating procedures to evaluate the design, practical execution, effectiveness, and efficiency of each system.
- Annual Self-Assessment: Overseeing annual departmental self-assessments to ensure operational efficiency, reliability of financial reporting, and compliance with relevant laws and regulations.
- Risk Assessment & Audit Planning: Assessing operational risks to formulate the annual audit plan, which is executed following approval by the Board of Directors.
Internal control self-inspection procedures
The Audit Office maintains a rigorous follow-up mechanism and deploys a dedicated audit team to ensure internal control compliance across the company and all subsidiaries:
- Report Follow-up & Action Plans: Beyond identifying issues, risk levels, and recommendations, audit reports require audited units to submit action plans and expected completion dates. The Audit Office conducts follow-up reviews upon deadline to verify implementation results.
- Team Structure & Audit Scope: The office is staffed with 1 full-time Audit Head and 2–3 internal auditors. The audit scope encompasses all operational processes within the nine major transaction cycles, covering the company and all subsidiaries.