Chapter 1 General Principles
Article 1
To standardize the selection (including reappointment and change of appointment, the same below) of accounting firms by Hangzhou Chuhuan Technology Co., Ltd. (hereinafter referred to as "the Company"), improve the quality of financial information, and effectively protect shareholder interests, this system is formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China (hereinafter referred to as "the Securities Law"), the Management Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies, and other relevant laws and regulations, as well as the Articles of Association of Hangzhou Chuhuan Technology Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The Company shall select accounting firms to issue audit opinions and audit reports on financial accounting reports in accordance with relevant laws and regulations and shall follow this system to fulfill the selection procedures. The selection of other special audit firms may be executed in accordance with this system depending on the significance.
Article 3
The selection of accounting firms by the Company shall be reviewed and approved by the audit committee, submitted to the board of directors for review, and decided by the shareholders' meeting. The board of directors shall not appoint accounting firms before the shareholders' meeting makes a decision.
Article 4
The controlling shareholders and actual controllers of the Company shall not designate accounting firms for the Company and shall not interfere with the independent performance of review duties by the audit committee, board of directors, and shareholders' meeting.
Chapter 2 Requirements for Accounting Firm Quality
Article 5
The accounting firms selected by the Company must meet the following conditions:
- Comply with the relevant provisions of the Securities Law;
- Have a fixed workplace, sound organizational structure, and complete internal management and control systems;
- Be familiar with national laws, regulations, rules, and policies related to financial accounting;
- Earnestly implement the relevant laws, regulations, rules, and policies regarding financial audits, have a good social reputation and professional quality, and not be listed in the industry prohibition range by regulatory authorities;
- Have registered accountants capable of completing audit tasks and ensuring audit quality;
- Other conditions stipulated by the China Securities Regulatory Commission.
Chapter 3 Procedures for Selecting Accounting Firms
Article 6
The audit committee is responsible for the selection of accounting firms and supervising the conduct of their audit work. The audit committee shall earnestly perform the following duties:
- Formulate policies, processes, and related internal control systems for selecting accounting firms as authorized by the board of directors;
- Propose to initiate the selection of accounting firms;
- Review selection documents, determine evaluation elements and specific scoring criteria, and supervise the selection process;
- Propose the accounting firms to be selected and the audit fees, submitting them for decision-making;
- Supervise and evaluate the audit work of accounting firms;
- Regularly (at least annually) submit evaluation reports on the performance of the appointed accounting firms and reports on the audit committee's supervisory responsibilities to the board of directors;
- Be responsible for other matters related to the selection of accounting firms as stipulated by laws and regulations, the Articles of Association, and authorized by the board of directors.