Chapter 3. Audit Tracking. |
| Article 29 |
A bank shall specify in its internal control system necessary control operations for its subsidiaries and urge its subsidiaries to establish internal control system in consideration of the local regulations that govern the subsidiary and the nature of its business.
The chief auditor of a bank shall examine the internal audit operation of the bank’s subsidiaries on a regular basis and report the examination results to the board of directors, and send a copy of the report to the subsidiary’s board of director as basis for personnel performance evaluation. |
| Article 30 |
If a bank conceals the fact about its poor internal management, lack of internal control, inadequate implementation of its internal audit system and regulatory compliance system, or results of improvement actions taken in response to the comments of financial examiner, or its internal audit unit conceals the audit findings that results in material fraud, relevant personnel involved shall take the responsibility for negligence of duties. The bank should commend internal auditors whose discovery of major fraud or omission saves the bank from material loss.
Where the administrative unit or business unit of a bank is found to commit major omission or fraud, the internal audit unit has the right to recommend disciplinary actions and shall make full disclosure in the internal audit report personnel responsible for the major omission. |
| Article 31 |
The internal audit unit of a bank should continuously follow up on the examination opinions of or deficiencies found by banking examiner, accountant, internal auditor (including the internal auditor of financial holding company) or business unit, and recommendations enumerated in the internal control statement, and report the status of improvement actions taken to the board of directors and supervisors in writing, and include them as major items in the performance review of the administrative units and business units.
The competent authority will set forth guidelines for evaluating the audit work of a bank. |