
General Principles - The internal audit system of Zhejiang Century Huatong Group Co., Ltd. aims to standardize the internal audit functions and enhance corporate governance capabilities based on relevant laws and regulations [1][2] - Internal audit is defined as an evaluation activity conducted by internal personnel to assess the effectiveness of internal controls, risk management, and the authenticity and completeness of financial information [1][2] Internal Audit Structure - The company establishes an audit committee under the board of directors, with independent directors constituting more than half of the members [2][3] - An internal audit institution is set up to supervise the implementation of internal control systems and the authenticity of financial information, reporting directly to the audit committee [2][3] Responsibilities and Requirements - The audit committee is responsible for guiding and supervising the internal audit institution, reviewing work plans and reports quarterly, and coordinating with external audit units [3][4] - The internal audit institution must evaluate the completeness and effectiveness of internal control systems and report findings to the audit committee at least quarterly [5][6] Audit Procedures - Internal audit activities must follow professional standards and ethical norms, ensuring independence and objectivity in evaluations [7][8] - Audit personnel are required to maintain confidentiality and avoid conflicts of interest while conducting audits [7][8] Evaluation and Reporting - The internal audit institution must submit an annual internal audit work plan and a report within four months after the fiscal year ends [6][9] - The audit report should include objectives, scope, findings, conclusions, and recommendations for improvement [11][12] Compliance and Monitoring - The internal audit institution is tasked with monitoring compliance with laws and regulations, ensuring that significant transactions and financial activities are conducted according to established procedures [14][15] - Regular evaluations of internal controls related to financial reporting and information disclosure are mandatory, with findings reported to the audit committee [19][20] Documentation and Record Keeping - Audit documentation must be complete, accurate, and securely stored for a minimum of seven years, with a clear process for managing and accessing these records [20][21] - The internal audit institution is responsible for maintaining the integrity of audit files and ensuring that they are available for review by the audit committee [20][21]