The TSEC will select a company for audit by the following criteria:
- where an Internal Control System Statement is issued with a statement other than "no material deficiency" in the internal control system.
- where an Internal Control System Statement containing a statement of material deficiency has been issued within the most recent three years.
- 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."
- 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.
- 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.
- where there is any change in mid-year to an annual audit plan already filed, without reasonable grounds.
- where any material non-compliance was found during the previous internal control system audit.
- where there is any change in financial or internal audit executives, without reasonable grounds.
- random selection will be made from among listed companies whose internal control system has not been audited during the most recent three years; however, a company may be exempted from selection if during the preceding year the company has obtained corporate governance certification from an external independent objective institution, provided that if any material deficiency is found in the company's internal control, an audit of its internal control shall still be conducted.
- where an audit is otherwise necessary.