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Article 1
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These Guidelines are adopted by the Taiwan Stock Exchange Corporation (the "TWSE") in accordance with the provisions of Article 7 of the Procedures for Review of Securities Listings and Article 4-1 of the Operational Procedures for the Review of Foreign Securities for Listing of the TWSE.
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Article 2
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When the audit or review by a CPA making a listing application for a company applying for initial stock listing of the internal control system review reports, financial reports or financial forecasts attached to the application is discovered to be deficient under any of the following circumstances, the TWSE may impose dispositions on the CPA in accordance with Article 3:
- The contents of the financial reports of the company applying for stock listing do not follow the Regulations Governing the Preparation of Financial Reports by Securities Issuers, Regulations Governing the Preparation of Financial Reports by Securities Firms, generally accepted accounting principles, or related laws and regulations, or established practices, or if the consolidated financial reports submitted by a foreign issuer applying for a primary stock listing or Taiwan Innovation Board (TIB) primary listing do not follow Articles 28-3, paragraphs 3 and 4 or Article 29, paragraph 7 of the Rules Governing Review of Securities Listings or Article 4-1, paragraph 1, subparagraph 1, item 3 of the Operational Procedures for the Review of Foreign Securities Listing of the TWSE, thus resulting in errors or inaccuracy to the extent the amount affected reaches the amount specified in Article 6, paragraph 1, subparagraph 1 of the Securities and Exchange Act Enforcement Rules but is not disclosed.
- Failure to disclose the facts which shall be disclosed in the financial reports of the company applying for stock listing, and the failure is potentially misleading but is not disclosed.
- Failure to conduct the audit or review in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants or the Auditing Standards Committee’s Engagement Standards.
- Failure to follow the Financial Forecast Review Guidelines when reviewing the listing applicant company's financial forecasts.
- Failure to indicate the failure of the applicant company to follow the Regulations Governing Establishment of Internal Control Systems by Public Companies or related directives.
- Failure of the CPA to conduct the required audit procedure in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies.
- Failure of the CPA to issue an appropriate internal control system review reports in accordance with the Regulations Governing Establishment of Internal Control Systems by Public Companies.
- Deficiencies in the written supplementary information issued during the period of review of the listing application in regard to the internal control system review reports, financial reports or financial forecasts.
- Other deficiencies identified by the TWSE.
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Article 3
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If any of the circumstances under the subparagraphs of the preceding article applies to the CPA, the TWSE must request the CPA to provide a written explanation with regard to the circumstances concerned, and submit said explanation together with information on the deficiency to the the administering department of the TWSE for approval. The TWSE may then impose any of the following dispositions on the CPA depending on the severity of the violation:
- request the CPA in writing to rectify
- make a public announcement of the CPA’s deficiency as discovered by the TWSE and report to the competent authority
- submit to the Securities Listing Review Committee to deliberate on whether to reject the the financial reports of the listing applicant company that have been attested by the CPAs for a certain period
If the Securities Listing Review Committee decides to reject the CPA-attested financial reports of the listing applicant company for a certain period, the TWSE will reject the listing applicant company’s attested financial reports for two to six months from the first day of the month following the date of public announcement and will further report to the competent authority for disciplinary action to be taken.
If the public company’s financial reports having been audited and attested, or reviewed, by the CPA contain false information or if information is withheld from said reports, the TWSE may request, with relevant evidence presented, the Securities and Futures Investors Protection Center to take action accordingly.
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Article 3-1
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A CPA on whom the TWSE imposes a disposition in accordance with Article 3, paragraph 1, subparagraph 2 or 3 may, within 20 days from the day following the date of the TWSE letter, file an appeal with the TWSE, with the reason for appeal stated and relevant data submitted. The reason for appeal is limited to whether the reason for finding the CPA deficient is erroneous or not. Upon receiving an appeal, the department imposing the disposition shall express specific comments and review the appeal as follows:
- Disposition in Article 3, paragraph 1, subparagraph 2: An administering department meeting shall be held to review the matter again, with the results of review to be submitted to the general manger for approval.
- Disposition in Article 3, paragraph 1, subparagraph 3: The appeal shall be forwarded again to the Securities Listing Review Committee for review.
If merit is found in an appeal, action shall be taken in accordance with the resolution approved, and the results shall be reported to the competent authority in writing. An appeal shall be rejected if no merit is found in it or if it is otherwise determined based on the relevant data that the disposition should be sustained.
A CPA who withdraws his or her appeal during the appeal proceeding is deemed to not have lodged an appeal.
An appeal will not be entertained if it is not submitted by the CPA within the time prescribed in paragraph 1, the appellant fails to meet the qualification requirements, the reason for appeal is irrelevant to the disposition imposed, documents or data that are missing are not submitted as rectification within the time prescribed by the TWSE, or the appeal is relodged in connection with the same disposition.
Execution of an original disposition imposed is not suspended by an appeal.
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Article 4
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These Guidelines shall take effect after having been submitted to and approved by the competent authority and publicly announced. Subsequent amendments thereto shall be effected in the same manner.
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