Article Content
Section 5 Audits by the Accountant.
| Article 26 | When a credit cooperative engages an accountant to audit its annual financial statements, it shall also ask the same accountant to audit its internal control system and express opinion regarding the accuracy of information provided in the financial statements as well as the implementation of the credit cooperative’s internal control system, regulatory compliance system, and the appropriateness of credit cooperative’s bad debt reserve policy.
The accountant’s audit fees will be at the expense of the credit cooperative as agreed between the credit cooperative and the accountant.
Paragraph 1 does not apply to a credit cooperative which is taken over by the competent authority pursuant to laws. |
| Article 27 | Where necessary, the competent authority may order the credit cooperative and its accountant to provide explanations regarding the audit as described in the preceding article, and ask the credit cooperative to replace its accountant to conduct another audit if the competent authority deems that the accountant is incompetent for the audit work. |
| Article 28 | In carrying out audit as described in Article 26 herein, the accountant shall inform the competent authority immediately in case of any of the following situations:
1. In the process of audit, the accountant was unable to continue the audit work because the credit cooperative did not provide the statements, supporting documents, account books or meeting minutes asked by the accountant or refuse to provide explanation to the inquires of the accountant, or due to the other objective circumstances.
2. The credit cooperative under audit is found to contain untruthful information in its accounting or other records, falsify, or omit accounting or other records, and the situation is of serious nature.
3. The credit cooperative under audit does not have adequate assets to cover its liabilities or its financial conditions markedly deteriorate.
4. Evidence indicates that a transaction of the credit cooperative might bring about material loss to its net assets.
Where the credit cooperative under audit is found to be in any of the situations described in subparagraphs 2 ~ 4 of the preceding paragraph, the accountant shall first submit a summary report to the competent authority based on the audit results. |
| Article 29 | A credit cooperative shall, before the end of April every year, file the previous year’s audit report of its accountant regarding the audits described in Article 26 herein with the Department of Finance of the municipal government or the county (city) government, who will also forward a copy of the report to the central competent authority. Such audit report shall contain at least information on the scope and basis of audit, audit procedure and results.
The accountant of a credit cooperative is obliged to provide relevant information and explanations to the questions raised by the competent authority regarding the audit report. |