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Article 31
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A securities firm shall disclose the following information regarding its attesting CPAs (external auditors):<br/>1. Information on professional fees:<br/>A. The securities firm shall disclose the amounts of the audit fees and non-audit fees paid to the attesting CPAs and to the CPA firm to which they belong and to any affiliated enterprises as well as the details of non-audit services. "Audit fees" means professional fees paid by the securities firm to its attesting CPAs for audits, reviews, and secondary reviews of financial reports, and reviews of financial forecasts.<br/>B. When the securities firm changes its CPA firm and the audit fees paid for the financial year in which the change took place are lower than those paid for the financial year immediately preceding the change, the amount of the audit fees before and after the change and the reason shall be disclosed.<br/>C. When the audit fees paid for the current financial year are lower than those paid for the immediately preceding financial year by 10 percent or more, the amount and percentage of and reason for the reduction in audit fees shall be disclosed.<br/>2. Information on change in attesting CPAs: If a securities firm changed its attesting CPAs during the most recent 2 financial years or any subsequent interim period, it shall disclose the following information:<br/>A. Regarding the former attesting CPAs:<br/>a. Date of and reason for the change in attesting CPAs, together with a description of whether the attesting CPAs or the securities firm terminated or discontinued the engagement.<br/>b. If the former attesting CPAs issued an audit report during the most recent 2 years containing an opinion other than an unqualified opinion, state the opinion and reason.<br/>c. Indicate whether there were any disagreements between the securities firm and the former attesting CPAs on accounting principles or practices, financial report disclosure, and auditing scope or procedure. If any such disagreements did exist, the securities firm shall describe in detail the nature of each such disagreement, how the securities firm addressed them (including whether the securities firm has authorized the former attesting CPAs to respond fully to the inquiries of the successor attesting CPAs concerning such above-mentioned disagreements), and the final results.<br/>d. Indicate whether the former attesting CPAs advised the securities firm that it lacked the sound internal controls necessary to develop reliable financial reports.<br/>e. Indicate whether the former attesting CPAs advised the securities firm that the attesting CPAs were unable to rely on the securities firm's written representations, or was unwilling to be associated with the financial reports prepared by the securities firm.<br/>f. Indicate whether the former attesting CPAs advised the securities firm that the scope of the audit must be expanded, or there was information showing that an expanded audit might impact the reliability of either a previously issued financial report or the financial report to be issued, but due to the change of the attesting CPAs or for any other reason, the former attesting CPAs did not expand the scope of the audit.<br/>g. Indicate whether the former attesting CPAs advised the securities firm that information has come to the attesting CPAs' attention that might impact the reliability of either a previously issued financial report or the financial report to be issued, but due to the change of the attesting CPAs or for any other reason, the former attesting CPAs did not address the issue.<br/>B. Regarding the successor attesting CPAs:<br/>a. Names of the successor CPA firm and the attesting CPAs, and date of engagement.<br/>b. If prior to the formal engagement of the successor attesting CPAs, the securities firm consulted the new attesting CPAs regarding the accounting treatment of or application of accounting principles to a specific transaction, or the type of audit opinion that might be rendered on the securities firm's financial report, the securities firm shall disclose the issues that were the subjects of those consultations and the consultation results.<br/>c. The securities firm shall consult and obtain written views from the successor attesting CPAs regarding the matters on which the securities firm disagreed with the former attesting CPAs, and disclose information on these views.<br/>C. The securities firm shall by letter provide the former attesting CPAs with a copy of the disclosures it is making in response to item A and item B (c), and advise the attesting CPAs of the need to respond by letter within 10 days should the attesting CPAs disagree on any such matters. The securities firm shall disclose the content of the reply letter from the former attesting CPAs.<br/>3. Where the securities firm's chairperson, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the CPA firm of its attesting CPAs or at an affiliated enterprise of such CPA firm, the name and position of the person, and the period during which the position was held, shall be disclosed. The term "affiliated enterprise" of the CPA firm of the attesting CPAs means an enterprise in which the attesting CPAs of the CPA firm to which the attesting CPAs belong hold more than 50 percent of the shares, or of which they hold more than half of the directorships, or any company or institution listed as an affiliated enterprise in the external publications or printed materials of the CPA firm of the attesting CPAs.
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