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Criteria Governing Approval for Auditing and Certification of Financial Reports of Public Companies by Certified Public Accountants(1983.07.07) |
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Article 1
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These Criteria are prescribed in accordance with Paragraph 1 of Article 37 of the Securities and Exchange Law.
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Article 2
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The financial reports of a public company shall be jointly audited and certified by more than two (2) practicing certified public accountants of a joint accounting firm.
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Article 3
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For auditing and certifying the financial reports of a public company, the practicing certified public accountants shall submit an application and attachments (Schedule 1) to the Securities and Futures Commission of Ministry of Finance (the "SFC") for approval.
The application referred to in the preceding Paragraph shall be filed in the name of the joint accounting firm to which such accountants belong and signed/sealed by all the practicing certified public accountants of the In the event that the application documents filed by the joint accounting firm are incomplete, and that the SFC requires that rectification be made within a specified time limit but no rectification is made within such time limit, the SFC may return the application.
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Article 4
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The joint accounting firm to which the certified public accountants auditing and certifying the financial reports of public companies belong shall meet the following requirements:
1.The firm shall be formed by more than three (3) practicing certified public accountants, and at least two (2) of them shall have practiced or actually participated in auditing enterprises for three (3) years or more;
2.The practicing certified public accountants who have practiced for more than one (1) year before the date of application shall have completed at least twenty (20) hours of advanced study in the most recent year;
3.There shall be more than six (6) auditing assistants, and at least two-thirds of them shall possess the qualifications under Items 1 and 2 of Paragraph 1 of Article 12 of the Certified Public Accountant Law or have passed the Higher Civil Service Examination for accounting or auditing personnel, and at least one-third of them shall be graduates of accounting graduate school or accounting department of universities, or have passed examinations for certified public accountants or Higher Civil Service Examination for accounting or auditing personnel, or possess the qualifications under Item 2 of Paragraph 1 of Article 12 of the Certified Public Accountants Law and have engaged in auditing work in an accounting firm for more than two (2) years;
4.The practicing certified public accountants shall not have been subject to the punishment of suspension of practice under the Certified Public Accountant Law, the Securities and Exchange Law, or other laws or regulations within two (2) years before the date of application;
5.The firm shall have a common office.
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Article 5
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In the event that an application for auditing and certifying the financial reports of public companies have any of the following conditions, the SFC may reject the application:
1.Where the provisions in Article 4 are not met;
2.Where internal operation rules are not prescribed as required, or where the internal operation rules are not effectively implemented without justifiable reasons;
3.Where the practicing certified public accountant has violated laws or regulations or professional ethics of certified public accountants to a serious extent.
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Article 6
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Unless otherwise provided in the laws or regulations, a certified public accountant shall audit and certify the financial reports of public companies in accordance with the generally accepted auditing standards prescribed by the Auditing Criteria Committee of the Accounting Research and Development Foundation of the Republic of China.
The auditing report for the auditing and certification referred to in the preceding Paragraph shall state the name, address, telephone number of the joint accounting firm, the reference number of the SFC approval letter, name and signature/seal of the certifying accountant, and dates.
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Article 7
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The certified public accountants approved to audit and certify the financial reports of public companies shall from time to time report to the SFC for recordation of any change of the matters listed in the attachment of the application referred to in Paragraph 1 of Article 3. However, for the change of certified public accountants or auditing assistants, a report shall be filed for registration in accordance with Paragraph 1 of Article 9 of the Accountant Law or for recordation in accordance with Paragraph 2 of Article 12 of the said Law, after which a report shall be filed to the SFC for recordation.
The report referred to in the preceding paragraph shall be filed in the name of the joint accounting firm and signed/sealed by at least half of the practicing certified public accountants.
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Article 8
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The joint accounting firm of the certified public accountants auditing and certifying the financial reports of public companies shall participate in the certified public accountant evaluation periodically held by the CPA association.
The regulations for certified public accountant evaluation referred to in the preceding Paragraph shall be drafted by the CPA association and reported to the SFC for approval.
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Article 9
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The certified public accountants approved to audit and certify the financial reports of public companies and the auditing assistants of the same joint accounting firm shall accept further study on periodic basis.
The regulations for the study referred to in the Preceding Paragraph shall be drafted by the CPA association and reported to the SFC for approval.
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Article 10
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In the event that a certified public accountant approved to audit and certify the financial reports of public companies or the joint accounting firm to which such accountant belongs has any of the following conditions, the SFC may revoke the approval:
1.Where the matters of application contain false statement or violate Article 7;
2.Where the joint accounting firm does not meet the provisions of Item 1, Item 3 or Item 5 of Article 4, and it is required to make improvement within a specified time limit, but no improvement is made within such time limit;
3.Where the practicing certified public accountant is subject to the punishment of suspension of practice pursuant to the Securities and Exchange law, the Certified Public Accountant Law, or other laws or regulations;
4.Where the accounting firm refuses to participate in the certified public accountants evaluation, or the result of evaluation is not satisfactory, and it is required to make improvement within a specified time limit but no improvement is made within such time limit;
5.Where the practicing certified public accountant or auditing assistant fails to accept further study or the study is not satisfactory; or
6.Where other serious violation occurs.
After the above-mentioned conditions have extinguished for one (1) year, the certified public accountant may provide supporting documents to re-apply for approval in accordance with the provisions of Article 3.
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Article 11
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These Criteria shall become effective from the date of promulgation.
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