Chapter 1 General Principles
Article 1
To standardize the selection (including reappointment and transfer) of accounting firms by Jiuyang 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 Shenzhen Stock Exchange Listing Rules, the Management Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies, and other relevant laws, regulations, normative documents, and the Company's Articles of Association (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The term "selection of accounting firms" in this system refers to the Company's engagement of accounting firms to express audit opinions and issue audit reports on financial accounting reports in accordance with relevant laws and regulations. Accounting firms engaged for auditing financial statements (hereinafter referred to as "accounting firms") must comply with the provisions of this system. For the selection of other special audit services, the Company’s management may refer to this system based on the significance of the matter.
Article 3
The selection or dismissal of accounting firms by the Company shall be reviewed and approved by the Audit Committee of the Board of Directors (hereinafter referred to as "the Audit Committee"), submitted to the Board of Directors for deliberation, and decided by the shareholders' meeting. The Company shall not engage accounting firms to conduct audit business before the approval of the Board of Directors and the shareholders' meeting.
Article 4
The Company's controlling shareholders and actual controllers shall not designate accounting firms to the Company or interfere with the independent performance of the Audit Committee, Board of Directors, and shareholders' meeting before their deliberation.
Chapter 2 Quality Requirements for Accounting Firms
Article 5
The accounting firms selected by the Company must meet the following conditions:
- Have independent legal status and possess the qualifications and conditions required by the national industry authorities and the China Securities Regulatory Commission to conduct securities and futures-related business;
- Have a fixed workplace, sound organizational structure, and complete internal management and control systems;
- Be familiar with relevant national laws, regulations, rules, and policies regarding financial accounting;
- Have registered accountants capable of completing audit tasks and ensuring audit quality;
- Seriously implement relevant laws, regulations, rules, and policies regarding financial audits, and have a good social reputation and record of professional quality;
- The registered accountants responsible for the Company's financial report audits and signing the audit reports have not been subject to administrative penalties by regulatory agencies for violations of securities and futures practices in the past three years;
- 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 effectively perform the following duties:
- Formulate policies, processes, and relevant 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 engaged 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.