A public company shall carry out internal audits to assist the board of directors and mangers in inspecting and reviewing defects in the internal control systems as well as measuring operational effectiveness and efficiency, and shall make timely recommendations for improvements to ensure the sustained operating effectiveness of the systems and to provide a basis for review and correction.

A public company shall establish an internal audit unit under the board of directors, and shall appoint, according to its business size, business condition, management needs, and the provisions of other applicable laws and regulations, qualified persons in an appropriate number as full-time internal auditors and have deputies in place for the internal auditors. The deputies are required to carry out audit work in accordance with these Regulations.
Any appointment or dismissal of chief internal auditor of a public company shall be subject to approval by the board of directors. Where a public company has established the position of independent director, if an independent director objects to or expresses reservations about the appointment or dismissal, it shall be recorded in the minutes of the board of directors meeting. .
Where a public company has established an audit committee, any appointment or dismissal of the chief internal auditor shall be subject to approval by the audit committee and be submitted to the board of directors for a resolution, in which case Article 4, paragraph 4 shall apply mutatis mutandis.
When there is a change in the chief internal auditor of a public company, the company shall report the change and the reasons for it within 2 days counting inclusively from the date of occurrence via the Internet-based information system to the FSC for recordation.
The date of occurrence referred to in the preceding paragraph means the date of the resolution by the board of directors, or other date sufficient to determine the appointment or dismissal of the chief internal auditor, whichever comes first.
The requirements for the qualified full-time internal auditors referred to in paragraph 1 shall be as prescribed separately by the FSC.

A public company shall include at least the following in its implementation rules for internal audits:
1. Purpose, functions, and responsibility of the internal audit unit.
2. Assessment of internal control systems to measure the effectiveness of, and compliance with, existing policies and procedures, and their effects on operational activities.
3. A detailed listing of audit items, times, procedures, and methods.

A public company's internal audit unit shall formulate annual audit plans based on the results of the risk assessment, including matters to be audited monthly, and shall faithfully implement the annual audit plans, so as to assess its internal control systems, and prepare audit reports, annexing working papers and relevant materials.
A public company shall include at least the following as audit items in its annual audit plan for each year:
1. Matters relating to compliance with applicable laws, regulations, and bylaws.
2. The control activities for major financial or business activities, such as for acquiring or disposing of assets, engaging in derivatives transactions, extending loans to others, granting endorsements or guarantees for others, and management of related party transactions.
3. Supervision and management of subsidiaries.
4. Management of operation of board meetings.
5. Management of preparation process of financial statements, including management of application of International Financial Reporting Standards, procedures for professional accounting judgments, and processes for making changes in accounting policies and estimates.
6. Inspection of information and communications security.
7. Major operating cycles such as the sale and receipt cycle and purchase and payment cycle.
The annual audit plan of a public company that has established an audit committee shall also include the management of audit committee meeting operations.
Each annual audit plan of a company whose stock is exchange-listed or traded over-the-counter shall also include management of the operations of the remuneration committee.
Each annual audit plan of a company whose stock is exchange-listed or traded over the counter shall include the management of sustainability information.
A public company's annual audit plan, and any amendments thereto, shall be passed by the board of directors.
Where a public company has established independent director position(s), when it submits the annual audit plan to the board of directors for deliberation under the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions, and shall include their opinions in the board meeting minutes.
The audit report referred to in paragraph 1, the working papers, and relevant information referred to therein shall be preserved for no less than 5 years.

The internal auditors of a public company shall communicate fully with the audited unit regarding the inspection results of the annual audit items, and shall faithfully disclose in audit reports any defects and irregularities of the internal control systems discovered in assessment and, after having presented the reports, follow up on the matters and prepare follow-up reports at least on a quarterly basis until such time as correction is made, to ensure that the relevant departments have taken appropriate corrective measures in a timely manner.
A public company shall include any defects, irregularities, and the status of corrections in the internal control systems as referred to in the preceding paragraph as major items of performance evaluation for each department.
The status of correction of defects and irregularities of internal control systems referred to in paragraph 1 shall include all defects found in the course of inspections by the FSC, found in the course of internal audit operations, those listed in Internal Control System Statements, and those discovered in the course of self-assessment or by CPAs in special audits.

After having presented the audit and follow-up reports, a public company shall submit the same for review by the supervisors by the end of the month next following the completion of the audit items.
A public company's internal auditors discovering any material violation or any likelihood of material damage to the company shall promptly prepare and present a report and notify the supervisors.
If a public company has independent directors, when complying with the preceding two paragraphs, it shall simultaneously submit the materials or notification to the independent directors.

The internal auditors of a public company shall be detached, independent, objective, and impartial, in faithfully performing their duties, and shall exercise due professional care, and in addition to reporting their audit operations to each supervisor on a regular basis, the internal audit officer shall also attend and deliver a report to a board of directors meeting.
The internal auditors shall perform their duties in good faith and shall not do any of the following:
1. Conceal or make false or inappropriate disclosure of any the company's business activities, reporting, or compliance with applicable laws, regulations, and bylaws, knowing that they have caused direct damage to an interested party;
2. Damage any right or interest of the company or any interested party through neglect of duty;
3. Act beyond the scope of audit functions or engage in other improper activity, with the intent to gain illegal benefit for him/herself or a third party, violate the auditor’s duties or embezzle company assets.
4. Conduct an audit on a department where he/she worked within the past 1 year.
5. Fail to recuse him/herself from auditing of cases in which he or she has a personal interest or has a conflict of interest.
6. Fail to audit any matter as instructed by the FSC or provide relevant information; or
7. Provide, promise, request, or accept, directly or indirectly, unreasonable gifts, entertainment, or any other improper benefits in whatever form.
8. Any other activity in violation of any act or regulation or prohibited by any rule of the FSC.

The internal auditors of a public company shall pursue continuing education as well as attend internal audit training held by institutions recognized by the FSC, to improve their auditing quality and competence.
The internal audit training referred to in the preceding paragraph shall include the various professional courses, computerized auditing, and basic legal knowledge.
The hours required for the continuing education under paragraph 1 shall be as prescribed separately by the FSC.

A public company shall report to the FSC for recordation the names, ages, educational background, experience, seniority, and training of its internal auditors by the end of January each year via the Internet-based information system.

A public company shall submit to the FSC for recordation its next year's audit plan by the end of each fiscal year and a report on the execution of its previous year's annual audit plan within 2 months from the end of each fiscal year in the prescribed format via the internet-based information system.

A public company shall report to the FSC for recordation its corrections of any defects and irregularities of the internal control system discovered during the past year's internal auditing within 5 months from the end of each fiscal year in the prescribed format and via the internet-based information system.