Chapter 1 General Principles
Article 1
To standardize the internal audit work of Beijing Weitongli Electric Co., Ltd. (hereinafter referred to as "the Company"), improve the corporate governance structure, regulate business conduct, enhance the quality of internal audit work, and prevent and control company risks, this system is formulated in accordance with the "Audit Law of the People's Republic of China," "Basic Standards for Internal Auditing," and other relevant laws and regulations, as well as the provisions of the "Articles of Association of Beijing Weitongli Electric Co., Ltd." (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The term "internal audit" in this system refers to the evaluation activities conducted by the Company's internal institutions or personnel regarding the effectiveness of internal control systems and risk management, the authenticity and completeness of financial information, and the efficiency and effectiveness of business activities.
Article 3
The purposes of internal audit include but are not limited to: promoting the establishment and improvement of internal controls, effectively controlling costs, improving management, avoiding operational risks, preventing illegal activities, safeguarding shareholder rights, and increasing company value.
Article 4
The term "internal control" in this system refers to the process by which the Company's board of directors, audit committee, senior management, and other relevant personnel provide reasonable assurance to achieve the following objectives:
- Compliance with national laws, regulations, rules, and other relevant provisions;
- Improving the efficiency and effectiveness of the Company's operations;
- Ensuring the safety of the Company's assets;
- Ensuring that the Company's information disclosure is true, accurate, complete, and fair.
Article 5
This system applies to all internal institutions, branches/subsidiaries, holding subsidiaries, and significant equity investees of the Company.
Chapter 2 Audit Institutions and Personnel
Article 6
The audit committee establishes an internal audit department, which is responsible to the board of directors and reports its work to the audit committee of the board. The internal audit department supervises and inspects the Company's business activities, risk management, internal controls, and financial information. All internal institutions, branches/subsidiaries, holding subsidiaries, and significant equity investees of the Company shall cooperate with the internal audit department in performing its duties and shall not obstruct its work. The internal audit department shall maintain independence, be staffed with full-time auditors, and shall not be under the leadership of the finance department or share office space with it.
Article 7
The internal audit department shall have one head responsible for the overall work of the audit department and shall be equipped with several corresponding auditors based on the scale of operations. According to the Company's development plan, a multi-level and multi-functional audit supervision system shall be gradually established to conduct audit supervision on necessary audit projects of various departments and subordinate units. The head of the audit department must be a full-time position appointed and dismissed by the audit committee.
Article 8
Based on the Company's scale, production characteristics, and relevant regulations, full-time auditors shall be assigned to conduct internal audit work. Auditors should possess necessary professional knowledge, corresponding business capabilities, and good professional ethics, and maintain and improve their professional competence through regular or irregular internal audit training and continuing education.
Article 9
Internal auditors shall conduct audits in accordance with laws and the Company's relevant systems, be loyal to their duties, adhere to principles, work diligently, and maintain independence, objectivity, fairness, integrity, compliance with laws, and confidentiality.
Article 10
Auditors involved in audit matters with conflicts of interest or relationships with the audited units, departments, or personnel shall recuse themselves.