A CPA licensed in the ROC engaged to conduct a secondary review on accounting principle differences and impacts shall conduct the following secondary review procedures:
- Obtain a written declaration that the auditing and attesting CPA of the financial reports complies with the independence requirement of the International Ethics Standards Board for Accountants (IESBA).
- Study the Chinese translation of the financial reports and check them against the original language versions to ascertain whether their content matches the meaning of the original.
- Verify whether the correct calculations were used to convert monetary amounts in the financial statements for expression in the ROC currency. The exchange rate may in principle be the exchange rate on the balance sheet date for the most recent year, provided that the conversion method and the basis used for the exchange rate shall be noted in the bottom section of the financial statements, as well as the highest, lowest, and average exchange rate for the most recent three years.
- Note the differences between the accounting principles used in the financial reports of the foreign company and those used in the ROC.
- Conduct a secondary review of the process of reconciling the accounting principles of the two countries.
- Conduct a secondary review of whether the format of the financial reports conforms to the requirements of the ROC.
- Ascertain whether, during the period from the balance sheet date in the financial reports to the date when the secondary review report is produced, any event under Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act having a material impact on shareholder equity or securities prices has occurred with respect to the foreign company.