Chapter 1 General Principles
Article 1
To standardize the selection (including reappointment and replacement) of accounting firms by Jiangxi Xinyu Guoke Technology Co., Ltd. (hereinafter referred to as "the Company"), effectively safeguard the interests of the Company and its shareholders, and improve audit quality, this system is formulated in accordance with the "Management Measures for the Selection of Accounting Firms by State-owned Enterprises and Listed Companies," the "Articles of Association of Jiangxi Xinyu Guoke Technology Co., Ltd." (hereinafter referred to as "the Articles of Association"), and other relevant regulations, 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 the Company's financial accounting reports and internal controls, in accordance with relevant laws and regulations. The selection of other specialized audit firms may be executed in accordance with this system based on their significance.
Chapter 2 Responsibilities and Authority
Article 3
The selection of accounting firms by the Company must be reviewed and approved by a majority of all members of the Board of Directors' Audit Committee (hereinafter referred to as "the Audit Committee") and submitted to the Board of Directors for deliberation, with the final decision made by the shareholders' meeting. The Company shall not engage accounting firms to conduct audit work before the deliberation by the Board of Directors and the shareholders' meeting.
Article 4
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 relevant internal control systems for the selection of accounting firms as authorized by the Board of Directors;
- Propose the initiation of 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 the 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.
Article 5
The Audit Committee shall maintain a high level of caution and attention to the following situations:
- Changing accounting firms after the balance sheet date until the annual report is issued, changing accounting firms for two consecutive years, or changing accounting firms multiple times in the same year;
- The proposed accounting firm has been administratively punished multiple times for professional quality issues or has multiple audit projects under investigation in the past three years;
- The original audit team proposed to be hired has moved to another accounting firm;
- Significant changes in audit fees compared to the previous year, or the selected price is significantly lower than the benchmark price;
- The accounting firm has not substantively rotated audit project partners or signing certified public accountants as required.