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Article 24
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In addition to the requirements under Chapter II, CPAs auditing the major subsidiaries of a TWSE (or TPEx) primary listed company or a foreign emerging stock company shall comply with the following requirements:<br/>1. Understand fully the organization of the group and major subsidiaries, including the major subsidiaries' industries, supplier relationships, customer relationships, and technological development, and local laws, regulations and bylaws affecting their business operations, tax laws, government policies, and environmental regulations relating to their local operations, and local business customs and practices.<br/>2. In implementing the process of written confirmation regarding the relevant items in the financial reports of major subsidiaries, if it is difficult to send written confirmation requests to the financial institutions or the counterparties, or the reliability of the received confirmation is doubtful, evaluate whether the CPA should personally make the inquiries on site.<br/>3. Ascertain the relationship between the management of the major subsidiaries and the major clients and suppliers, and also ascertain whether the audited entity does not provide information on related party transactions.<br/>4. Ascertain whether any material difference exists between the performance and the trends of changes of the major subsidiaries' operating revenue, gross profit ratio, and profitability, and those of peer companies. If the aforementioned circumstance exists, ascertain and analyze the reasonableness, and when necessary, obtain relevant assessment information from outside organizations.<br/>5. Ascertain the correctness of the amounts recorded with respect to the major subsidiaries' major and newly added properties, plants, and equipment, and check the reasonableness between such amounts recorded and the information publicly released to outside parties by the company or relevant units, and the money flows, and other supporting documentation.<br/>6. Obtain the major subsidiaries' applicable tax rate structure, and ascertain whether it complies with the local laws and regulations. If any material difference exists between the applicable tax rate structure and the information disclosed in the financial report, ascertain the cause and its reasonableness.<br/>7. Ascertain the cause and reasonableness of any other matters having a material effect on the fair presentation of the audited company's financial reports, and give them appropriate treatment.
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