Wuhan Tianyu Information Industry Co.Ltd(300205)
Internal audit system
Chapter I General Provisions
Article 1 in order to establish and strengthen the internal audit supervision of Wuhan Tianyu Information Industry Co.Ltd(300205) (hereinafter referred to as “the company”), improve internal control, promote operation and management, improve economic benefits and safeguard the legitimate rights and interests of the company and all shareholders, according to the Audit Law of the people’s Republic of China This system is formulated by the Ministry of Finance in combination with the actual situation of the company and other relevant national laws and regulations, such as the basic norms of enterprise internal control and the guidelines for self discipline supervision of Listed Companies in Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM.
Article 2 the term “internal audit” as mentioned in this system refers to the independent and objective supervision and evaluation activities carried out by the company’s internal audit institutions or personnel on the effectiveness of internal control and risk management, the authenticity and integrity of financial information and the efficiency and effect of business activities of the company’s internal institutions and holding subsidiaries in accordance with relevant national laws and regulations and the provisions of this system.
Article 3 the term “internal control” as mentioned in this system refers to the process in which the board of directors, the board of supervisors, senior managers and all employees of the company provide reasonable assurance to achieve the following objectives:
(I) comply with national laws, regulations, rules and other relevant provisions;
(II) improve the efficiency and effect of the company’s operation;
(III) ensure the safety of the company’s assets;
(IV) ensure that the company’s information disclosure is true, accurate, complete and fair.
Article 4 this system is applicable to all internal institutions and holding subsidiaries of the company.
Article 5 all internal organs or functional departments of the company, holding subsidiaries and joint-stock companies that have a significant impact on listed companies shall cooperate with the internal audit department in performing its duties according to law and shall not hinder the work of the internal audit department.
Chapter II Internal Audit institutions and personnel
Article 6 the audit department is the internal audit institution of the company and a permanent institution subordinate to the audit committee of the board of directors. The audit department shall inspect and supervise the establishment and implementation of the company’s internal control system and the authenticity and integrity of the company’s financial information. The audit department shall maintain its independence and shall not be placed under the leadership of the financial department or work together with the financial department. The audit committee is responsible for supervising and evaluating the work of the audit department. The audit department is responsible to the audit committee and reports to the audit committee.
Article 7 the company shall be equipped with full-time internal auditors matching the audit tasks, and the internal auditors shall have the knowledge, experience and skills required to carry out audit activities.
Article 8 when performing their duties, internal auditors shall abide by the professional code of conduct stipulated in relevant national laws and regulations, and be independent, objective, impartial and confidential.
Article 9 internal auditors shall exercise their functions and powers in accordance with relevant national laws and regulations and these systems, and shall be protected by national laws and company rules and regulations. No department or individual shall refuse or hinder internal auditors from performing their tasks, and shall not retaliate against internal auditors.
Chapter III responsibilities and authorities of internal audit
Article 10 as the office of the audit committee of the board of directors, the audit department shall accept the guidance and supervision of the audit committee. The audit department performs the following main responsibilities:
(I) inspect and evaluate the integrity, rationality and effectiveness of the internal control system of the company’s internal institutions, holding subsidiaries and joint-stock companies that have a significant impact on the company;
(II) audit the accounting data and other relevant economic data of the company’s internal institutions, holding subsidiaries and joint-stock companies that have a significant impact on the company, as well as the legality, compliance, authenticity and integrity of the reflected financial revenue and expenditure and relevant economic activities, including but not limited to financial reports, performance forecasts, performance letters Voluntary disclosure of predictive financial information, etc;
(III) assist in establishing and improving the anti fraud mechanism, determine the key areas, key links and main contents of anti fraud, and reasonably pay attention to and inspect possible fraud in the process of internal audit;
(IV) report to the audit committee at least once a quarter, including but not limited to the implementation of the internal audit plan and the problems found in the internal audit.
Article 11 the internal audit department shall implement appropriate review procedures in accordance with relevant regulations, evaluate the effectiveness of the company’s internal control, and submit an internal control evaluation report to the audit committee at least once a year.
The internal control evaluation report shall state the purpose, scope, conclusion and suggestions for improving internal control of the review and evaluation.
The scope of internal control review and evaluation shall include the establishment and implementation of internal control systems related to financial reports and information disclosure. The audit department shall focus on the integrity, rationality and effectiveness of the internal control system related to large non operating capital transactions, foreign investment, purchase and sale of assets, foreign guarantee, related party transactions, use of raised funds, information disclosure and other matters. Article 12 the audit department shall submit the internal audit work plan for the next year to the audit committee two months before the end of each fiscal year, and submit the annual internal audit work report to the audit committee two months after the end of each fiscal year.
The audit department shall take the audit of important external investment, purchase and sale of assets, external guarantee, related party transactions, use of raised funds and information disclosure as the necessary contents of the annual work plan.
Article 13 the audit department shall inspect the internal control system of monetary funds at least once a quarter. When examining the internal control system of monetary funds, we should focus on whether the authorization and approval procedures for large non operating Monetary Fund expenditures are sound, whether there is ultra vires approval, and whether there are weak links in the internal control of monetary funds. If any abnormality is found, it shall be reported to the audit committee in time.
Article 14 the internal audit department shall inspect the following matters at least once every six months, issue inspection reports and submit them to the audit committee. If it is found that the company has violations of laws and regulations and non-standard operation, it shall timely report to Shenzhen Stock Exchange and urge the company to disclose:
(I) the implementation of high-risk investments such as the use of raised funds, provision of guarantees, related party transactions, securities investment and derivatives transactions, provision of financial assistance, purchase or sale of assets, foreign investment and other major events;
(II) the company’s large amount of capital transactions and capital transactions with directors, supervisors, senior managers, controlling shareholders, actual controllers and their affiliates.
The audit committee shall issue a written evaluation opinion on the effectiveness of the company’s internal control according to the internal audit report and relevant materials submitted by the internal audit department, and report to the board of directors.
Article 15 the internal audit department shall submit an internal audit report to the audit committee at least once a year.
For the internal control defects found in the review process, the internal audit department shall urge the relevant responsible departments to formulate rectification measures and rectification time, conduct follow-up review of internal control, and supervise the implementation of rectification measures. If major defects are found in the process of internal audit or in the process of internal control, it shall report to the internal audit committee in a timely manner.
Article 16 the audit department shall carry out the audit work based on the business links of the company, and evaluate the rationality of the design and effectiveness of the implementation of internal control related to financial reports and information disclosure according to the actual situation.
Article 17 the work of the audit department shall cover all business links related to financial reports and information disclosure in the company’s business activities, including but not limited to: Sales and collection, procurement and payment, fixed assets management, inventory management, fund management, investment and financing management, financial reports, human resources management, information system management and information disclosure management.
The audit department can adjust the above business links according to the industry and production and operation characteristics of the company. Article 18 the audit evidence obtained by internal auditors shall be sufficient, relevant and reliable. The internal auditors shall clearly and completely record the name, source, content, time and other information of the audit evidence in the working paper.
Article 19 the internal auditors shall prepare and review the audit working papers in accordance with the relevant provisions in the audit work, and timely sort out and file the audit working papers after the completion of the audit project. The audit department shall establish a working paper system and establish a corresponding file management system in accordance with the provisions of relevant laws and regulations. The internal audit work report, working papers and relevant materials shall be kept for ten years. Article 20 in order to effectively perform the above responsibilities of internal audit, the board of directors grants the audit department the following authorities: (I) participate in the formulation and revision of relevant rules and regulations and put forward improvement opinions on the defects of the company’s internal control;
(II) participate in relevant meetings of the company and hold meetings related to audit matters;
(III) according to the needs of internal audit, require relevant departments to cooperate and provide relevant production, operation and financial revenue and expenditure plans, budgets, final accounts, accounting statements and other relevant documents and materials on time and truthfully;
(IV) check the materials and documents related to production, operation and financial activities, and investigate the physical objects on site;
(V) inspection of computer and related data;
(VI) investigate departments and individuals related to audit matters and obtain relevant supporting materials; (VII) have the right to report to the Audit Committee on the departments and individuals that obstruct and hinder the audit work, and put forward suggestions on investigating the responsibilities of relevant personnel;
(VIII) have the right to make a temporary decision to stop the ongoing serious violation of the company’s rules and regulations or causing heavy losses to the company and report to the audit committee in time; Put forward handling suggestions to the Audit Committee for serious violations of the company’s rules and regulations or behaviors that have caused significant losses to the company;
(IX) put forward suggestions on improving operation and management and improving economic benefits;
(x) other powers conferred by the board of directors.
If the recommendation institution and the accounting firm point out that there are significant defects in the company’s internal control, the board of directors and the board of supervisors of the company shall make a special explanation for the matters involved. The special explanation shall at least include the basic information of the matters involved, the opinions of the board of directors and the board of supervisors on the matter, and the specific measures to eliminate the matter and its impact.
Chapter IV working procedures of internal audit
Article 21 the audit department shall follow the following working procedures when organizing specific internal audit work:
(I) formulate audit work plan. Within two months before the end of each fiscal year, the audit department shall formulate the annual work plan of internal audit according to the actual situation of the company and the business plan of the next year, and organize the implementation after being approved by the audit committee.
(II) establish an audit team. According to the project audit plan, the audit department shall appoint internal auditors to establish an audit team and determine the chief auditor. The chief auditor is responsible for formulating the audit plan. If necessary, you can apply for other professionals to participate in the audit or provide professional suggestions.
(III) issue internal audit notice. The audit department shall deliver the internal audit notice to the auditee three days before the implementation of the audit, stating the audit content, type, method and time.
(IV) audit. Internal auditors select appropriate audit methods and procedures according to different types of audit projects to carry out specific audit work and prepare audit working papers.
(V) submit the first draft of the audit report. After the implementation of the audit, the chief auditor shall put forward the first draft of the audit report according to the audit working paper, and solicit the opinions of the auditee on the first draft of the audit report.
(VI) make audit decisions. After soliciting the opinions of the auditee and making appropriate modifications, the first draft of the audit report shall form a formal audit report and submit it to the relevant management of the company.
(VII) archives management. After the completion of each audit project, the audit department shall sort out and archive the audit working papers, audit reports and other documents. The storage time is ten years.
(VIII) follow up audit. The audit department shall timely arrange internal auditors to inspect and supervise the implementation of audit decisions by the auditee.
Chapter V reward and punishment
Article 22 internal auditors who are devoted to their duties, earnestly perform their duties, avoid major economic losses or make management suggestions for the company, and promote significant economic benefits, and those who actively cooperate with internal audit, report and expose illegal acts, safeguard the interests of the company and protect the company’s property shall be rewarded with the approval of the board of directors.
Article 23 If internal auditors violate relevant laws and regulations and the company’s rules and regulations, take advantage of their powers to seek personal interests, practice fraud, practice favoritism, neglect their duties, cause economic losses to the company, and disclose the company’s secrets, they shall be subject to corresponding administrative or economic sanctions after being reported to the board of directors for approval according to the seriousness of the circumstances; If a crime is constituted, criminal responsibility shall be investigated according to law.
Article 24 the audit department shall, depending on the seriousness of the case, punish the departments and individuals who refuse or delay to provide documents related to audit matters, obstruct the internal auditors from exercising their functions and powers, resist audit supervision and inspection, resort to fraud, conceal the truth, refuse to implement audit decisions, and retaliate against internal auditors and prosecutors, After reporting to the board of directors for approval, they shall be subject to corresponding administrative or economic punishment.
Chapter VI supplementary provisions
Article 25 this system shall come into force on the date when it is deliberated and adopted by the board of directors.
Article 26 matters not covered in this system shall be implemented in accordance with relevant national laws and regulations and the articles of Association; In case of any conflict between this system and the laws and regulations promulgated by the state in the future or the revised articles of association, it shall be implemented in accordance with the provisions of relevant national laws and regulations and the articles of association, and shall be timely revised and reported to the board of directors for deliberation and approval.
Article 27 the power of interpretation of this system belongs to the board of directors of the company.
Wuhan Tianyu Information Industry Co.Ltd(300205) February 4, 2010
First revision on November 28, 2012 second revision on February 28, 2002
