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Title: Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountant Ch
Date: 2022.12.27
Legislative: 1.Promulgated on December 19, 2001
2.Amended on November 30, 2015
3.Amended on December 27 , 2022
Content: Article 1
These Regulations are enacted pursuant to Paragraph 2, Article 20 of Company Act and Paragraph 3, 
Article 27 of Limited Partnership Act.

Article 2
A certified public accountant (CPA) engaged to audit and attest financial statements shall do so in 
accordance with these Regulations. Matters not provided herein shall be subject to the Standards on 
Auditing.

Article 3
When an audited company or limited partnership (hereinafter referred to as auditee) changes its 
CPA, the successor CPA shall act in accordance with provisions in TWSA 201A, "Communication 
between Successor and Predecessor Auditors," and make liaison with the former CPA.

Article 4
If any item in the financial statements of an auditee for a given period requires adjustment as a 
result of a CPA audit or a determination by the competent authority for the given accounting event, 
and if no such adjustment has been made by the time the CPA performs an audit for the ensuing 
period, the CPA shall request the auditee to make the adjustment or otherwise an explanation to be 
given in a financial statement footnote, except where the entity only needs to reclassify the item on 
the financial statements or provide a footnote that no adjustment to any book entry is necessary.

Article 5
CPAs and their assistants (hereinafter referred to as auditors) shall pursue continuing professional 
further education to expand their professional knowledge and practical experience and shall adhere 
to a code of professional ethics.

Article 6
Financial statements to be audited by a CPA engaged for that purpose shall have been prepared by 
the auditee on the basis of its account books and other relevant documents and sufficient appropriate 
evidence shall be obtained in accordance with provisions in TWSA 500, "Audit  Evidence," to be 
the basis for issuing the audit report.

Article 7
When initially engaged to audit financial statements, a CPA shall, for its audits on opening balances, 
perform necessary audit procedures and issue an appropriate audit opinion in accordance with 
provisions in TWSA 510, "Initial Audit Engagements-Opening Balances."

Article 8
When planning to use the audit work of other CPAs, a CPA shall observe provisions in TWSA 600, 
"Special Considerations-Audits of Group Financial Statements."

Article 9
When using the work of an auditor’s expert as audit evidence, a CPA shall comply with TWSA 620, 
"Using the Work of an Auditor’s Expert," and carefully evaluate the adequateness of the work of the 
auditor’s expert.

Article 10
When engaged to audit financial statements, a CPA shall observe the provisions in TWSA 250," 
Consideration of Laws and Regulations in an Audit of Financial Statements," about evaluating the 
auditee's compliance with laws and regulations.

Article 11
When conducting audits in an information technology environment, auditors shall observe 
provisions in TWSA 315, "Identifying and Assessing the Risks of Material Misstatement."

Article 12
A CPA shall plan audit implementation work in consideration of the characteristics of the relevant 
industry and in accordance with TWSA 315, "Identifying and Assessing the Risks of Material 
Misstatement," and TWSA 330, "The Auditor’s Responses to Assessed Risks."

Article 13
At the beginning of an audit, a CPA shall first make the following checks by taking sufficient data 
for that purpose:
1.Check vouchers against supporting source documents on an item-by-item basis.
2.Check vouchers against journal entries on an item-by-item basis.
3.Check vouchers against subsidiary ledger entries on an item-by-item basis.
4.Check journal entries against general ledger entries on an item-by-item basis.
5.Check the sum of account balances in each subsidiary ledger against the balance in the control 
account in the general ledger.

Article 14
With respect to subsequent events occurring to an auditee after the balance sheet date, a CPA shall, 
in accordance with TWSA 560, "Subsequent Events," ascertain whether events of material 
significance have been adjusted or  disclosed in the financial statements.

Article 15
Prior to commencement of an audit, a CPA shall plan the audit work in accordance with TWSA 300, 
"Planning an Audit of Financial Statements."

Article 16
When using the work of internal auditors as audit evidence in an audit of financial statements, a 
CPA shall evaluate the quality of the internal audit work in accordance with TWSA 610, " Using the 
Work of Internal Auditors."

Article 17
When conducting test of control, auditors shall observe provisions in TWSA 315, "Identifying and 
Assessing the Risks of Material Misstatement."

Article 18
When performing substantive audit procedures, auditors shall comply with provisions in TWSA 330, 
"The Auditor’s Responses to Assessed Risks." If applying substantive analytical procedures, 
auditors shall adopt appropriate analytical procedures as determined by professional judgment and 
in accordance with TWSA 520, "Analytical Procedures."

Article 19
General procedures for auditing financial statements shall be in accordance with these Regulations 
and the Standards on Auditing; provided that such procedures may be amended with addition or 
deletion adapted to specific industrial features or actual needs and applicable laws and regulations. 
When necessary, new auditing procedures may be compiled based on the amendment with reasons 
provided in the audit documentation.

Article 20
When engaged to perform an audit, a CPA shall establish relevant audit files for information with 
long-term importance to financial statements of the auditee, which shall continue to be reviewed, 
and updated or supplemented with new information, in each subsequent audit.

Article 21
For the purpose of auditing and attesting financial statements, a CPA shall first check the balance in 
each account in the financial statements against that in the general ledger, and shall also check each 
account in the general ledger against the sum of account balances in the corresponding subsidiary or 
account ledger, and subsequently, where all accounts are reconciled, perform audit procedures as 
follows:
1.Cash and cash equivalents:
(1) Evaluate the system of internal controls over cash, perform a test count of cash on hand, and, if 
the date of counting does not fall on the balance sheet date, make reconciliation to see whether the 
figure agrees.
(2) With respect to cash on hand and petty cash, ascertain the existence of any non-cash items, such 
as employee IOUs, uncashed checks and unreimbursed vouchers, and make appropriate adjustment 
if necessary.
(3) Ascertain expenses reported and reimbursements made through petty cash and revolving funds, 
determine the remaining balances of each, check unreimbursed vouchers, and make necessary 
adjustments.
(4) Check the amounts on bank statements against those in the ledger, and send a written 
confirmation request to the bank. If there is any discrepancy, obtain a bank reconciliation statement 
prepared by the auditee and perform a test audit of the reconciliation items.
(5) Perform a test audit of stubs from cash receipt books and check stubs and verify against cash 
book entries. Take note of whether any check has been issued for use by other parties or affiliated 
enterprises without being recorded on the books, and if so, make an adjusting entry or footnote 
disclosure.
(6) Ascertain whether bank deposits designated for specific purposes or otherwise restricted have 
been reported in a footnote or reclassified to an appropriate account.
(7) Perform an inventory count of deposit certificates and audit the estimation and recording of the 
interest receivable.
(8) Where bank deposits increase due to a capital increase, ascertain the source of the capital and 
how it has been utilized, and whether the amount has been overstated or understated.
(9) For any matured note receivable that has not been deposited into the bank by the balance sheet 
date, ascertain whether such note has been deposited by the beginning of the ensuing period. Also 
note why such deposit has not been made.
(10) Perform a test audit of the supporting source documents for large inflows and outflows of cash 
and bank deposits, paying attention to changes in cash and bank deposits immediately prior to and 
after the balance sheet date. If there is a large or irregular fluctuation, ascertain the cause.
(11) Select two time periods, one before and one after the balance sheet date, and check all 
supporting source documents for material cash transactions and interbank funds transfer transactions 
during each period, to ensure that there has been a proper cut-off of cash items.
(12) If there are any foreign currency deposits, ascertain whether such deposits have been adjusted 
to the spot exchange rate at the balance sheet date.
(13) If there are any cash equivalents, the audit procedures for short-term investments shall apply 
mutatis mutandis, and the appropriateness of their classification shall be ascertained.
2.Short-term investments:
(1) Ascertain purchase and sale procedures of short-term investments and related certificates.
(2) Conduct an on-site inventory of securities on hand jointly with the custodian or check the 
centralized securities depository passbook, and check the amount against account book entries, to 
verify ownership and liquidity.
(3) With respect to securities on deposit with others or provided as security or pledged as loan 
collateral, send a written confirmation request or otherwise check the custody receipt.
(4) Ascertain whether the accounting basis and ending valuation are appropriate.
(5) If any item is identified as having been used to secure an obligation or for any other purposes, 
ascertain whether the fact has been reported in a footnote or the item has been reclassified to an 
appropriate account.
(6) Ascertain the appropriateness of recording dividends or interest income.
(7) If any short-term investments should be in the category of cash equivalents or long-term 
investments, ascertain whether such investment has been reclassified to an appropriate account.
3.Notes receivable, accounts receivable and operating revenues:
(1) Assess the internal control system for operating revenues and check the transaction records and 
all supporting source documents to verify whether revenue records are reliable and whether 
uniformed invoices have been issued according to law.
(2) Conduct a comparative analysis against the amounts from the previous period to determine 
whether the trend of changes is reasonable. If there has been any material change, ascertain and 
analyze the cause.
(3) If the auditee has engaged in consignment sales or distribution business, ascertain whether the 
accounting records agree with the information from the underlying contractual agreements.
(4) Ascertain the content and classification appropriateness of the recording of principal operating 
revenues.
(5) Send written confirmation requests to debtors randomly selected.
(6) For any notes receivable pledged as security, send a written confirmation request to the pledgee, 
and ascertain whether the fact has been reported in a footnote.
(7) Jointly conduct an inventory of notes on hand, and if any notes on hand are held by a third party 
or have been entrusted to a bank for collection, send a written confirmation request to the holder or 
audit the supporting documents for such bank collection. If the inventory date is not the balance 
sheet date, reconcile the difference.
(8) If it is found that a note has been exchanged with another party, it shall be reported in a footnote 
or reclassified to an appropriate account.
(9) Prepare an aging schedule and perform an aging analysis of accounts receivable, ascertain the 
collection of notes and accounts receivable during the subsequent period, and, if any such item 
remains uncollected after the due date, ascertain whether appropriate treatment has been made.
(10) Ascertain whether allowance for bad debts has been set aside in an appropriate manner and 
amount.
(11) Ascertain whether appropriate treatment has been given with respect to notes or accounts 
receivable under dispute or litigation.
(12) Ascertain whether bad debts have been properly written off.
(13) Select two time periods, one before and one after the balance sheet date, and check all 
supporting source documents for each period, to ensure that there has been a proper cut-off of sales 
transactions and sales returns.
(14) Ascertain whether there have been any major sales returns or allowances in the current and the 
subsequent period, if so, inquire into the reasons and find out whether they have been adequately 
presented.
(15) If it is found that a note or account receivable has arisen from a non-operating activity, 
ascertain whether it has been reclassified to an appropriate account.
(16) Ascertain whether notes and accounts receivable are presented in such a manner as to 
distinguish between current and non-current items, and ascertain whether they have been measured 
at amortized cost. However, short-term notes and accounts receivable with no stated interest rate 
may be measured at the original invoice amount if the effect of discounting is immaterial.
(17) Ascertain whether any internal profit from internal transfer pricing has been offset.
(18) Ascertain whether the interest income and interest receivable arising from interest-bearing 
notes receivable have been recorded.
(19) For discounted notes receivable, if any, check the discount records, send a written confirmation 
request, and ascertain whether proper accounting treatment has been given.
(20) If there are any notes or accounts receivable denominated in a foreign currency, ascertain 
whether they have been adjusted to the spot exchange rate at the balance sheet date.
(21) Ascertain whether notes and accounts receivable arising from transactions with related parties 
have been adequately presented.
4.Other receivables:
(1) Note the nature of each line item under "other receivables" and, for those not constituting current 
assets, ascertain whether they have been reclassified to an appropriate account.
(2) Send written confirmation requests when it is deemed necessary and ascertain the status of 
collections during the subsequent period.
(3) Ascertain whether the amount provided as allowance for bad debts is reasonable.
(4) Ascertain whether other receivables with significant amount have been separately presented.
5.Inventories and operating overhead:
(1) Evaluate the internal control system for operating overhead and check the transaction records 
and all supporting source documents to verify the reliability of the classification, calculation and 
recording of operating overhead.
(2) Conduct a comparative analysis against the amounts from the previous period to determine 
whether the trend of changes is reasonable. If there has been any material change, ascertain and 
analyze the cause.
(3) Ascertain the accounting basis and calculation method with respect to inventories, check 
whether they are consistent with those used in the previous period, and, for any change therein, 
ascertain the reasonableness thereof and whether appropriate treatment has been given.
(4) The relevant audit procedures for the physical inventory of the auditee shall be conducted in 
accordance with the provisions of TWSA 501 " Audit Evidence—Specific Considerations for 
Selected Items, " and check physical inventory counts and results of inventory testing against the 
inventory list and book entries.
(5) If significant variance exists between the book quantity of an inventory and the actual quantity 
counted during the on-site inventory, ascertain the reason.
(6) While the on-site inventory is being conducted, if there are items being sold on consignment or 
held for other parties, verify that they have been separately stored and labeled, and obtain the 
specifications, quantities and other relevant information, to ensure that they are not included in the 
inventory of the auditee.
(7) For inventories stored outside, send a written confirmation request to the custodian and other 
auditing procedures can be adopted when necessary.
(8) Select two time periods, one before and one after the balance sheet date, and check all 
supporting source documents for each period, to ensure that there has been a proper cut-off of 
operating overhead.
(9) If the sales costs include any drawback of customs or excise duties on exportation, ascertain 
whether proper accounting treatment has been given.
(10) Ascertain whether any inventory has been provided as pledge or security or possessed in trust, 
and if so, whether the fact has been reported in a footnote.
(11) Ascertain whether damaged, deteriorated, or long-term unmarketable inventory items, if any, 
have been valued at the lower of cost or net realizable value.
(12) Value ending inventories at the lower of cost or net realizable value.
(13) Ascertain the ownership of any inventory in transit, and, if it belongs to the auditee, whether 
appropriate accounting treatment has been given.
(14) Ascertain the appropriateness of the procedures for handling idle and obsolete materials.
6.Prepayments:
(1) Where a prepayment is required to be reclassified as an expense or to an appropriate account, 
ascertain whether such reclassification has been made and whether the amounts agree.
(2) Ascertain whether any prepayment involves a contractual relationship, and, if so, content of the 
contract and the extent of contractual obligations the counterparty has performed. Send a written 
confirmation request to the counterparty when necessary. 
7.Other current assets:
Ascertain the nature of each item falling under the category of "other current assets," find out 
whether it has been appropriately classified and given proper accounting treatment, and if an item is 
unusual in nature, find out whether the fact has been stated in detail in a footnote.
8.Long-term investments:
(1) Conduct, jointly with the custodian, an on-site inventory of securities acquired through 
long-term investments and inspect relevant supporting source documents. If any of such securities 
are deposited with others, send a written confirmation request and check custody receipts or perform 
other necessary audit procedures to verify the ownership.
(2) Ascertain the procedures for acquiring and disposing long-term investments and appropriateness 
of accounting treatment thereof.
(3) Ascertain whether an appropriate accounting basis was applied in recording long-term 
investments and whether they have been properly classified.
(4) If any long-term investment has been provided as security, pledged, or is otherwise subject to 
any restriction or limitation, ascertain whether such facts have been reported in a footnote.
(5) In the event that investments confer significant influence, exercise joint or substantive control 
over the investees, ascertain whether such investments have been valued under the equity method.
(6) For long-term investments having no significant influence over the investees, ascertain whether 
ending valuation is appropriate.
(7) In recognition of the profit and loss shares for investments accounted for using the equity 
method, ascertain whether CPA-audited financial statements have been acquired in accordance with 
applicable regulations.
(8)Ascertain whether any unrealized profit or loss with respect to an affiliated company has been 
written off.
(9)Ascertain whether the difference between the cost of an investment accounted for using the 
equity method and the net equity value and unrealized profits have been treated as required.
(10) For long-term investments, if there is any indication that an impairment may have occurred, 
ascertain whether the impairment test and its accounting treatment are appropriate.
(11)Ascertain whether there has been reclassification of long/short-term investments and accounting 
treatment thereof is appropriate.
(12)Ascertain whether the ending valuation of long-term investments is appropriate.
(13)Ascertain the appropriateness of recording dividends or interest income.
(14)Ascertain whether investees are going concerns, and if any of them is not, whether proper 
adjustment or footnote disclosure has been made.
9.Property, plant and equipment, investment property, intangible assets and biological assets:
(1)Ascertain whether the title to property, plant and equipment is held by the auditee, and when 
necessary, observe the on-site inventory or conduct a joint on-site inventory of representative 
property, plant and equipment. If the title to any of such assets is not registered under the name of 
the auditee for the time being because of statutory restrictions, ascertain whether any perpetuation is 
in place and whether a proper explanation has been provided in a footnote.
(2)Ascertain whether there is any property, plant and equipment that is not intended for use in the 
operation of the business. If there is, reclassify it to an appropriate account, in keeping with its 
character.
(3)Ascertain whether any property, plant and equipment or investment property has been provided 
as security, pledged, or otherwise subject to any restriction, and, if so, whether the fact has been 
reported in a footnote.
(4)Ascertain the entry basis of property, plant and equipment and intangible assets. If reappraisal 
has been made pursuant to laws, ascertain whether reappraisal period and reappraised amount have 
been reported in a footnote, and whether depreciation or amortization after revaluation have been set 
aside in accordance with applicable requirements. For land that has been revalued, ascertain whether 
the amount of increment is appropriate and whether land value increment tax has been reserved 
pursuant to laws. 
(5)Ascertain whether property other than land, plant and equipment, investment property and 
intangible assets have been depreciated and amortized in a rational and systematic manner in 
accordance with current statutory requirements, and ascertain whether the amounts are appropriate.
(6)Ascertain whether capitalization policies and depreciation and amortization methods and periods 
applied to property, plant and equipment, investment property and intangible assets are consistent 
with those of the previous period. In the event of changes, ascertain whether such changes are 
reasonable and accounting treatment is appropriate, and whether facts of changes and quantitative 
effects have been reported in a footnote in terms of accounting policy changes or estimation changes 
based on the nature thereof.
(7)Ascertain the nature of addition of property, plant and equipment and investment property for the 
current period and expenditure items in connection with property, plant and equipment and 
investment property to determine whether such items are capital expenditures or expense 
expenditures, and ascertain whether they have been given proper accounting treatment.
(8)Ascertain whether proper accounting treatment has been given to capitalization of borrowing 
costs with respect to property, plant and equipment and investment property currently in the process 
of acquisition or construction.
(9)Ascertain the reasonableness of any significant change in prepayments for land or equipment.
(10)Ascertain any increase or decrease in property, plant and equipment, investment property and 
intangible assets in the current period, and whether it has been given proper accounting treatment.
(11)Ascertain whether the house rentals, land rentals and any other revenues arising from property, 
plant and equipment and investment property have been properly recorded.
(12)Ascertain whether any assets have been leased, and if so, whether such leases have been given 
proper accounting treatment.
(13)Ascertain the components of intangible assets, and whether they have been given proper 
accounting treatment.
(14)Check the supporting source documents, papers and licenses related to intangible assets.
(15)Ascertain whether intangible assets are still useful and whether their costs have been amortized 
over their expected useful life.
(16) Ascertain whether there is any indication that the asset may be impaired. If there is any 
indication of impairment, ascertain whether the estimated recoverable amount of the asset is 
appropriate. In addition, ascertain whether the book value of assets other than goodwill after the 
reversal of impairment loss does not exceed the book value determined by the asset if the 
impairment loss is not recognized in the previous year.
(17) Ascertain whether the accounting treatment of biological assets and their harvested agricultural 
produce inventory is appropriate.
10.Other non-current assets:
(1)Inspect all supporting source documents to confirm the reasonableness of the amounts recorded.
(2)If any item under "other non-current assets" is subject to amortization, ascertain the 
reasonableness of the amortization method.
(3)For any long outstanding funds for which it is impossible to obtain confirmation from the debtor 
or which is not likely to be collected, ascertain whether such funds have been written off or 
sufficient allowances for bad debts have been set aside.
(4)Ascertain whether any items under "other non-current assets" with significant amount have been 
separately presented.
(5)For items held in custody for other parties, conduct a joint on-site inventory with the custodian(s) 
and send written confirmation requests to such other parties, when it is deemed necessary.
(6)Ascertain the nature of any refundable deposit paid out as security and the reasonableness and 
necessity thereof.
(7) Ascertain whether there is any indication that the asset may be impaired. If there is any 
indication of impairment, ascertain whether the estimated recoverable amount of the asset is 
appropriate. In addition, ascertain whether the book value of the asset after the reversal of the 
impairment loss does not exceed the book value determined by the asset if the impairment loss is 
not recognized in the previous year.
11.Borrowings:
(1)Ascertain whether borrowings have been separately presented as bank overdraft, bank borrowing, 
commercial paper payable, banker's acceptance, or other borrowings.
(2)Identify any significant borrowing agreements and send written confirmation requests to confirm 
the borrowing balances, interest rates, repayment periods, credit lines, critical covenants and 
collateralization status.
(3)Ascertain whether the bank overdraft balance is the balance after offsetting against the bank 
deposit, and if so, make appropriate adjustment.
(4)If there has been any borrowing from a shareholder, employee or related party, ascertain whether 
the fact has been reported in a footnote.
(5)Ascertain repayment of principal and interest on borrowing in the subsequent period. In the event 
of any delay in repayment, footnote disclosure shall be made.
(6)Identify interest payments made in the current period and perform checking calculation to verify 
whether interest prepaid or due period-end has been recorded appropriately.
(7)Ascertain whether there has been a breach of any important stipulations in a borrowing 
agreement, and if so, whether appropriate accounting treatment and disclosure have been given, and 
consider the effect thereof on the financial statements.
(8)If repayment must be made in a foreign currency as required by the borrowing agreement, 
ascertain whether such has been converted using the spot exchange rate at the balance sheet date.
(9)Ascertain whether non-current liabilities to be settled within one year have been reclassified as 
current liabilities.
(10)If the auditee has set aside a sinking fund, ascertain whether it has been done in accordance with 
applicable provisions.
12.Notes payable, accounts payable and purchases:
(1)Assess the internal control system for procurements, and check the transaction records and all 
supporting source documents to verify the reliability of purchase records.
(2)Ascertain payments made in the subsequent period or relevant supporting source documents, and 
when necessary, send written confirmation requests to major suppliers and creditors.
(3)If, as of the auditing date, the maturity date of any note receivables falls beyond the statutory 
term of validity, ascertain the reason and whether the note receivable has been rescheduled or 
reclassified to an appropriate account.
(4)Ascertain whether any note receivables have been exchanged with other parties, and if so, such 
note receivables shall be reported in a footnote or reclassified to an appropriate account.
(5)Select two time periods, one before and one after the balance sheet date, and check all supporting 
source documents for each period, to ensure that there has been a proper cut-off of purchase 
transactions and purchase returns.
(6)In the event of discovery of notes or account payables arising from non-operating activities, 
ascertain whether such have been reclassified to an appropriate account.
(7)Ascertain whether notes and accounts payable are presented in such a manner as to be 
distinguished between long and short terms, and whether the long-term ones have been recorded at 
present value.
(8)If collaterals have been provided to creditors for notes or account payables, ascertain whether the 
nature and description of such collaterals have been reported in a footnote.
(9)Ascertain whether notes payable are interest-bearing, and whether interest accrued in the current 
period has been recorded.
(10)If repayment with respect to a note or account payable has to be made in a foreign currency as 
required by an agreement, ascertain whether such has been converted using the spot exchange rate 
at the balance sheet date.
13.Accrued expenses and other payables:
(1)Select a period after the balance sheet date and check all supporting source documents for unpaid 
invoices, cash expenditures and major liabilities falling within that period to verify the existence of 
any unrecorded liabilities.
(2)For accrued expenses for which the amount is estimated or yet to be determined, ascertain 
whether the method of estimation is consistent with that applied in previous years, and whether any 
payments have been made in the subsequent period.
(3)Ascertain whether appropriate footnote disclosure has been made regarding negotiable 
instruments issued as installment payment for leased equipment.
(4)Identify any payments made in the subsequent period and all supporting source documents.
(5)If collaterals have been provided to creditors for payables, ascertain whether the nature and 
description of such collaterals have been reported in a footnote.
(6)Ascertain whether any items under "other payables" with significant amounts have been 
separately presented.
14.Payments received in advance and deferred credits:
(1)Ascertain the nature of each item within sales revenue received in advance, deposits received in 
advance, income received in advance and deferred credits, and perform a test check of the 
underlying contractual agreements, if any.
(2)Ascertain whether appropriate adjustment has been made to payments received in advance and 
deferred credits to reflect the accrual basis of accounting.
(3)Identify any change that has occurred in the subsequent period.
15.Corporate bonds payable:
(1)Obtain the issuance rules for corporate bonds and ascertain whether footnote disclosure has been 
made as to total authorized amount, interest rate, maturity, collateral or guarantee status and other 
relevant covenants and restrictions. In the case of a convertible corporate bond, ascertain whether 
the method of conversion and conversion status have been reported in a footnote.
(2)If there is a trustee or guarantor, ascertain whether any special clause is contained in the executed 
trust or guarantee agreement, and send a written confirmation request to the trustee or guarantor 
inquiring about the total issued and unissued amounts and the repaid or cancelled amount.
(3)Identify any interest payments made in the current period and perform a checking calculation to 
verify whether at period-end interest has been recorded appropriately, and whether any discounts or 
premiums have been properly amortized. If any convertible corporate bonds have been issued under 
a reverse repurchase agreement, ascertain whether an interest premium has been estimated and 
recorded, and whether an interest expense has been recognized, for each period in a rational and 
systematic manner.
(4)Ascertain whether corporate bonds repayable within one year have been reclassified as current 
liabilities.
(5)Ascertain the status of repayment of corporate bonds, and, in the case of convertible corporate 
bonds where capital increase or issuance of new shares is required by law, whether such has been 
duly carried out.
(6)Inspect relevant minutes of board meetings.
(7)Ascertain whether there has been a breach of any important stipulations in any agreements 
regarding the issuance of corporate bonds, and if so, whether appropriate treatment has been given, 
and consider the effect thereof on the financial statements.
16.Other non-current liabilities:
(1)Ascertain whether any items under "other non-current liabilities" to be settled or reimbursed 
within one year have been reclassified as current liabilities.
(2)On the basis of contracts, company rules or by-laws and meeting minutes, calculate and check 
the balance of liabilities.
(3)Send written confirmation requests to creditors or other relevant persons, when it is deemed 
necessary.
(4)For liabilities for which the amount is estimated, ascertain whether the basis of the estimate is 
appropriate, and whether any payments have been made in the subsequent period.
(5)Ascertain whether any items under "other non-current liabilities" with significant amounts have 
been separately presented.
17.Equity:
(1)Ascertain the total amounts of capital stock or capital contribution and paid-in capital or capital 
contribution, and, where shares have been issued, whether footnote disclosure has been made as to 
type of capital stock, par value per share, number of authorized shares, number of issued shares and 
any special terms and conditions.
(2)With respect to any change in capital amount, review relevant minutes of shareholders'' meetings 
and board meetings and shareholders'' written consent of the company, and, where in a limited 
partnership, the limited partnership agreement and partners'' written consent, for records of capital 
changes and approval documents issued by the competent authority or application documents 
submitted by the auditee, and further ascertain whether appropriate disclosure has been made as to 
the specific details of the change in capital.
(3)When it is deemed necessary, send a written confirmation request to the certification agent or 
stock registrar and transfer agent to inquire about the total number of shares issued.
(4)Analyze changes in capital reserve and retained earnings in current period and check against the 
articles of incorporation and minutes of shareholders'' meetings, and, where in a limited partnership, 
check against the limited partnership agreement and partners'' written consent
(5)Ascertain whether capital reserve, legal reserve and special reserve have been separately 
presented and whether they have been set aside in accordance with applicable prescriptions.
(6)Ascertain whether an explanation has been provided in a footnote on capital reserves of different 
nature.
(7)If quantitative effects exist for retrospective applications and retrospective restatement, ascertain 
whether proper accounting treatment has been given.
(8)Ascertain whether earnings distributions have been properly recorded or given footnote 
disclosure.
(9)Ascertain whether any restrictions on the distribution of retained earnings and capital reserves, or 
of any preferred stock dividends in arrears have been disclosed by footnote.
(10) If there is any doubt about the going-concern assumption underlying the financial statements of 
the auditee, perform all necessary audit procedures in accordance with provisions in TWSA 570, 
"Going concern," evaluate whether management's use of the going concern basis of accounting in 
preparing financial statements is appropriate and whether there is significant uncertainty about the 
auditee 's ability to continue as a going concern, ascertain whether such uncertainty is properly 
disclosed in the financial statements, and issue an appropriate audit report.
(11)If any treasury stock exists, conduct an inventory count and ascertain whether proper accounting 
treatment has been given.
(12)Ascertain whether proper accounting treatment has been given to other equity items.
18.Provisions, contingencies and commitments:
(1) If the auditee has any present obligation as a result of a past event, and it is probable that it will 
be required to settle that obligation and the amount can be reliably estimated, ascertain whether it 
has estimated and recorded provisions in accordance with applicable requirements.
(2)When auditing matters related to litigation and claims, do so in accordance with the TWSA 501 
"Audit Evidence—Specific Considerations for Selected Items," perform all necessary audit 
procedures, and issue an appropriate audit report.
(3)Identify and disclose by footnote any illegality that might have a significant effect on the fair 
presentation of the operating and financial statements of the auditee.
19.Operating expenses:
(1)Conduct a comparative analysis against the amounts from the previous period to determine 
whether the trend of changes is reasonable. If there has been any material change, ascertain and 
analyze the cause.
(2)Analyze material expenses and audit all supporting source documents to verify whether any of 
them requires reclassification as a capital expenditure.
(3)Examine the nature and significance of individual expenses and verify, in light thereof, whether 
they have been classified under the appropriate account.
(4)Select two time periods, one before and one after the balance sheet date, and check all supporting 
source documents for each period to ensure that there has been a proper cut-off of operating 
overhead.
20.Non-operating income and expenses:
(1)Conduct a comparative analysis against the amounts from the prior period and ascertain the cause 
for material differences, if any.
(2)Analyze income and expense items of significant amounts or unusual nature and ascertain the 
status of all supporting source documents and how they have been recorded.
(3)Examine the nature and significance of individual items and ascertain, in light thereof, whether 
they have been classified under the appropriate account.
21.Income tax:
(1)Ascertain whether the auditee has already recognized current income tax expense, deferred 
income tax asset and liability in accordance with applicable provisions, made appropriate 
presentation, and disclosed all relevant information.
(2)Ascertain whether there are any materially significant pending tax remedies, or any back taxes or 
tax refunds from previous fiscal years, and assess the effect thereof on current income tax and 
income tax payable.
22.Other comprehensive income:
(1)Conduct a comparative analysis against the amounts from the previous period and ascertain the 
cause for significant differences, if any.
(2)Examine the nature and significance of individual items and ascertain, in light thereof, whether 
they have been classified under the appropriate account.
23.Related party transactions: When auditing matters related to related party transactions, do so in 
accordance with the provisions of TWSA 550 "Related Parties," perform all necessary audit 
procedures, including:
(1)Ascertain the names, surnames or appellations of all related parties and their relationships with 
the auditee.
(2)Ascertain whether there are any transactions between the auditee and related parties.
(3)Ascertain purposes, prices and terms and conditions of the known transactions with related 
parties.
(4)Obtain from the auditee a statement that the transactions with related parties have been properly 
disclosed.
(5) Inspect the relevant records or documents to ascertain whether there is any other significant 
related party transaction information not provided by the auditee.
24.Other matters: If the auditee has engaged in non-arm's length transactions, ascertain and assess 
the effect thereof on the financial statements, and give appropriate treatment.

Article 22
Before issuing an audit report, a CPA shall obtain written representations in accordance with TWSA 
580, " Written Representations."

Article 23
A CPA engaged to perform an audit of financial statements shall faithfully make a record of actions 
taken pursuant to these Regulations, and compile the record, together with relevant audit evidence 
obtained, into audit documentation.

Article 24
Audit documentation is evidence of whether a CPA has duly fulfilled professional responsibilities, 
and is the basis upon which an audit report is prepared and audit opinions are expressed. All 
opinions, facts and figures presented in an audit report shall be supported by sufficient, competent 
and relevant evidence in the audit documentation.

Article 25
Audit working papers shall be prepared and maintained in safe custody in accordance with TWSA 
230, " Audit Documentation."

Article 26
After completion of an audit of financial statements in accordance with these Regulations and other 
applicable provisions, an audit report shall be issued in accordance with the Standards on Auditing.

Article 27
The "financial statements" referred to in these Regulations include the following statements and 
footnotes thereto:
1.Balance sheet.
2.Comprehensive income statement.
3.Statement of changes in owners'' equity.
4.Cash flow statement.
Each page of the balance sheet, comprehensive income statement, statement of owners'' equity and 
cash flow statement referred to in the preceding paragraph shall be signed or sealed by the director 
who is authorized represent the auditee, managerial officer, and in-charge accountant.

Article 28
Dollar amounts in financial statements shall be based on figures audited by a CPA. The dollar 
amounts need only be expressed in units of NT$1000, rounded to the nearest thousand, unless 
otherwise stated by laws and regulations or otherwise requested by the engaging party.

Article 29
These Regulations shall be enforced as of the date of promulgation.