Responsibilities:

Internal Audit Office assists the Board of Directors (BOD) and senior management to assess completeness, validity and implementation of Asus Group internal controls independently and objectively. Internal Audit Office provides improvement proposals properly to assure that internal controls in place are effective and efficient continuously. Pursuant to the delegation from the board and the senior management, Internal Audit Office conducts relevant investigation, assessment or consultation to assist the senior management and the board to fulfill responsibilities of corporate governance.

Organization:

Asus Audit office is an independent unit that reports directly to the board; it is supervised and led by the Chief Audit Executive (CAE) with an adequate number of full-time internal auditors. The appointment and removal of CAE shall be approved by the board. For the CAE's performance evaluation, the opinions of the Audit Committee are first considered, and the Chairman gives the final approval. This structure ensures internal audit independence and strengthens the Audit Committee's oversight. The recruitment, dismissal, evaluation and review, remuneration and compensation of internal auditors are submitted by the CAE to the Chairman for approval.

Asus Internal Audit Activities:

1. Headquarter Annual Audit:

Frame the annual audit plan proposals in accordance with risk assessment and relevant regulations. The annual audit covers but not limited to the Group's operational audit and legal compliance audit.

2. Special Audit:

The special audits are conducted irregularly from the board and senior management's requests.

3. Annual Self-Assessment of Internal Controls:

Co-ordinate [self-assessment of internal control] with each department practitioners to periodically evaluate the design, execution and effectiveness of its operation control items.

4. Subsidiary Audit:

Follow the annual audit plan and the board's requests to conducts periodical and un-periodical audit to evaluate and assure the business objective achievement, reliability of financial reporting and adequacy of internal controls. Audit office assists the board and senior management to obtain reasonable assurance on the subsidiary performance enhancement, compliance with application laws, effectiveness and efficiency of operations.

5. Consulting Service:

In order to enhance the business operation effectiveness and efficiency, Audit office also provides advisory on operation improvement and internal controls design.

All the audit reports and following-up reports are submitted periodically to the Audit Committee for reviewing. CAE must report key issues in the board meeting.