A securities firm shall select a professional, responsible and independent CPA to be its external auditor, who shall perform regular reviews of the financial conditions and internal control measures of the company. With regard to the irregularity or deficiency timely discovered and disclosed by the auditor during the review, and the concrete measures of improvement or prevention suggested by the auditor, the company shall faithfully implement improvement actions. The securities firm is also advised to establish a communication channel or system for its independent directors, supervisors or audit committee and certified public accountants, and establish the internal operation procedures that shall be included in the internal control system for control and management.
A securities firm shall evaluate the independence and adequacy of the auditor engaged by the company regularly and no less frequently than once annually. In the event that the company engages the same auditor without replacement for seven years consecutively, or if the auditor is subject to disciplinary actions or other circumstances prejudicial to the independence of the auditor, the company shall evaluate the necessity of replacing the auditor, and shall submit to the board the conclusion of such evaluation.