| Title： |
Taiwan Stock Exchange Corporation Direction for Auditing Internal Control Systems of Listed Companies(2007.01.10) |
| Date： |
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Article 4
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The TSEC will select a company for audit by the following criteria:
1. where an Internal Control System Statement is issued with a statement other than "no material deficiency" in the internal control system.
2. where an Internal Control System Statement containing a statement of material deficiency has been issued within the most recent three years.
3. where there is a change in the Internal Control System Statement from the original "compliance with all acts and regulations" to "compliance with major acts and regulations."
4. where there is failure to file an auditors list, audit plan, audit plan implementation report, report on correction of deficiencies and irregularities, or Internal Control System Statement under the Regulations for the Establishment of Internal Control Systems by Public Companies.
5. where any material deficiency is found in the implementation of the internal control system under the TSEC Directions for Routine and Exceptional Supervision of the Financial and Business Affairs of Listed Companies or the TSEC Directions for Review of Financial Reports of Listed Companies.
6. where there is any change in mid-year to an annual audit plan already filed, without reasonable grounds.
7. where any material non-compliance was found during the previous internal control system audit.
8. where there is any change in financial or internal audit executives, without reasonable grounds.
9. random selection will be made from among listed companies whose internal control system has not been audited during the most recent three years, provided that companies may be exempted from selection if during the preceding year they have been the subject of routine supervision, substantive review of the financial report, or exceptional supervision.
10. where an audit is otherwise necessary.
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Article 5
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When auditing the internal control system of a listed company, the TSEC shall, in addition to auditing one or more audit items selected from the annual audit plan formulated by such audited company, list the following matters as requisite audit items:
1. acquisition or disposal of assets.
2. trading in derivatives.
3. lending funds to others.
4. providing endorsements or guarantees for others.
5. state of operations of the board of directors.
6. such other audit items as the competent authority or the TSEC may deem necessary.
An audited company shall submit the following documents within the time limit designated by the TSEC:
1. Internal Control System Statements for the most recent three years.
2. any internal audit plan as well as self-inspection report, audit report, and follow-up report and relevant working papers on audit items that are prepared for the given year.
3. internal control recommendations issued by a certified public accountant for the most recent period.
4. such other materials as the TSEC may deem necessary.
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