These Procedures are specially adopted pursuant to Article 22 of the Regulations Governing Stock Exchanges and Article 5 of the Taiwan Stock Exchange Corporation Rules Governing Contracts for the Listing of Taiwan Depositary Receipts, for purposes of reviewing the financial reports of TWSE secondary listed companies.
The financial reports of a TWSE secondary listed company that are reviewed by the TWSE include the financial reports of all periods, review reports by ROC CPAs, and the working papers of the CPAs that performed the reviews.
The TWSE, within three working days from the deadline for public announcement and filing of financial reports of TWSE secondary listed companies, shall individually review the publicly announced and filed content of the financial reports, based on the items to be reviewed in the Checklist for Formal Review of Financial Reports of TWSE Secondary Listed Companies, and shall further requisition the review CPA's working papers, then individually review the content of the working papers based on the items to be reviewed in the Checklist for Formal Review of the Review CPA's Working Papers for Financial Reports of TWSE Secondary Listed Companies.
The TWSE shall regularly summarize and report to the competent authority, by the tenth day of each month, the status of its formal review of the public announcement and filing of financial reports of TWSE secondary listed companies for the preceding month, and by the tenth day of the following month, after summarizing and reporting the formal reviews under the preceding paragraph, shall report to the competent authority the results of its formal review of the working papers of the CPA that performed the review.
If any of the following circumstances applies to the financial reports of a TWSE secondary listed company or the CPA's review reports, the TWSE may contact the TWSE secondary listed company for an explanation. If, after analysis, the TWSE finds the explanation obviously unreasonable or that it contains material irregularities, the TWSE may request the TWSE secondary listed company to hire a CPA of the place of its original listing to provide an opinion on the TWSE's inquiries, or to conduct a special audit and prepare a report. However, with legitimate reason and with the approval of the TWSE, the TWSE secondary listed company may hire another CPA to carry out the above-mentioned matters.
- The TWSE secondary listed company does not publicly announce and file written financial reports as required.
- The CPA of the place of the original listing issues an audit report other than one with an unqualified opinion or a review report other than one with an unqualified conclusion.
- The ROC CPA that performed the review issues a non-standard report, or there is a material difference between the financial reports before and after reconciliation.
- There is a material change in the company's financial or operating conditions.
- The competent authority or the TWSE deems it necessary for other reasons.
A TWSE secondary listed company shall submit to the TWSE, within the time limit it prescribes, the opinions or special audit reports of the preceding paragraph and other related information.
When the TWSE reviews the financial reports of a TWSE secondary listed company and the ROC CPA's review reports, the TWSE secondary listed company shall cooperate with the TWSE and with TWSE-designated attorneys, CPAs, or other professionals or institutions, in conducting special audits within or outside the territory of the Republic of China as the TWSE deems necessary. All fees for hiring the aforementioned professionals or institutions, and the expenses incurred by the TWSE or by the aforementioned professionals or institutions, shall be borne by the given TWSE secondary listed company.
When the TWSE or TWSE-designated professionals or institutions perform audits on a TWSE secondary listed company pursuant to the preceding paragraph, the TWSE secondary listed company may not refuse, impede, or evade any examinations performed, and shall provide account books, forms/statements, documents, or other required materials to the TWSE or the aforementioned professionals or institutions within the designated time limit.
The TWSE-designated professionals or institutions conducting a special audit under the preceding paragraph shall prepare a special audit report and submit it to the TWSE along with the related materials set out in the preceding paragraph, and the TWSE, after undertaking an analysis, will report to the competent authority.
When any of the following circumstances applies to a TWSE secondary listed company, the TWSE may notify it by letter to make rectification or correction within a prescribed deadline. If it fails to make rectification or correction by the deadline, with no legitimate reason for its failure, then the TWSE, depending on the severity of the circumstance, may alter the trading method of the company's TWSE listed securities or delist the securities pursuant to Article 49-1 or Article 50-3 of the TWSE Operating Rules:
- The financial report publicly announced and filed is found after formal review to have not been filed pursuant to the requirements of laws and regulations.
- The TWSE secondary listed company fails to provide a reasonable explanation pursuant to Article 4 or does not provide an explanation within the deadline.
- The TWSE secondary listed company does not hire a CPA pursuant to Article 4, or the hired CPA does not provide an opinion or issue a special audit report, or material irregularities are found in the opinion or the special audit.
- The TWSE secondary listed company does not cooperate with the TWSE or the TWSE-designated professionals or institutions conducting special audits, or material irregularities are found after the special audit.
These Procedures shall after having been submitted to and approved for recordation by the competent authority. Subsequent amendments thereto shall be effected in the same manner.