The President promulgated the amendments to Article 14-5 and Article 36 of the Securities and Exchange Law (hereinafter, the “Law”) via the Hua-Zhong-One-Jing-1080063491 Decree of June 21, 2019. The amendments are highlighted below.
Firstly, for most companies, actual supervisors, rather than the board of directors, are currently in charge of preparing books and records such as financial reports, and most listed companies have abolished supervisors and have, instead, asked an audit committee consisting of independent directors to audit financial reports. To reflect reality, Article 14-5 of the Law as amended, which pertains to financial reports, provides that the annual financial report signed or sealed by the chairman, managerial officers, and the accounting head and the second quarter financial report which should be audited and certified by certified public accountants shall be adopted by the majority of the members of the audit committee and be submitted in a board meeting for resolution.
Secondly, a company issuing securities shall announce and submit an annual financial report signed or sealed by the chairman, managerial officers and the accounting head, audited and certified by certified public accountants, adopted in a board meeting and recognized by the supervisors to the competent authority within three months after the end of each accounting year in accordance with Article 36 of the Law as amended, except for special circumstances which are subject to separate requirements imposed by the competent authority. In addition, it is directly and specifically provided that financial reports shall be signed or sealed by the chairman, managerial officers and the accounting head and shall be audited and certified by the certified public accountants.