| Chapter 3 Management, Supervision, and Audit of the Internal Control System |
Section 6 Audit System with engaged CPAs |
| Article 44 |
If the annual financial report of a banking business is audited and certified by a certified public accountant (CPA), the business shall also engage the CPA to conduct a special audit on its internal control system. The CPA shall also comment on the correctness of the report submitted to the competent authority for the banking business, the execution status of the internal control system and regulatory compliance system, and the appropriateness of policies for loan loss reserves, including those of the foreign business units of the banking business.
A banking business shall engage a certified public accountant (CPA) to conduct a special audit on its personal data protection and anti-money laundering and countering the financing of terrorism mechanisms.
Certified public accountants conducting the audits referred to in the preceding two paragraphs shall provide a reasonable assurance report.
The special audit fees for the CPA shall be negotiated by the banking business and the CPA. The banking business shall pay the special audit fees to the CPA.
The provisions of Paragraph 1 and Paragraph 2 are not applicable to banking business taken over by the competent authority. |
| Article 45 |
The competent authority may, where necessary, invite a banking business and its appointed CPA to discuss matters related to the special audit under the preceding Article. If the competent authority finds that the CPA engaged by the banking business is not fully competent to perform the engaged audit work, it may order the banking business to replace the CPA and re-conduct the special audit. |
| Article 46 |
When performing the assurance work prescribed in Article 44, the CPA shall immediately notify the competent authority in the event of any of the following conditions:
1. During the process of assurance work, the business fails to provide the required reports, certificates, account books, and meeting minutes to the CPA, or refuses to make further explanation of the queries submitted by the accountant, or there are other objective environment restrictions to render the CPA unable his or her assurance work.
2. Where there are severe falsifications, forged data, or material omissions in its accounting or other records.
3. Where its assets are insufficient to discharge its liabilities, or its financial condition has significantly deteriorated.
4. Where there is evidence indicating that its transactions will cause material damage to the banking business’s net assets.
Where the banking business under audit has the conditions set forth in Subparagraphs 2 through 4 of the preceding paragraphs, the CPA shall also first submit a summary report on the results of the assurance procedures executed to the competent authority. |
| Article 47 |
When a banking business engages a CPA to conduct a special audit as provided in Paragraph 1 and 2 of Article 44, the business shall provide the CPA’s audit report of the previous year to the competent authority by the end of April each year for recordation. The assurance report shall at least entail the scope, basis, procedures, and results of the audit.
When a credit cooperative conducts such audit in accordance with the preceding paragraph, the audit report shall be submitted through the finance department of the municipal government or the county (city) government.
When the competent authority has queries concerning the contents of the assurance report, the CPA shall truthfully provide relevant information and explanation. |