When does delisting occur, and how have the standards for a failing audit opinion changed?

Delisting occurs immediately where a 'failing audit opinion' arises for two consecutive terms.

Here, a failing audit opinion means 'qualified,' 'adverse,' or 'disclaimer of opinion,' and if it arises for two consecutive terms, the company becomes subject to delisting.

However, an exception is recognized for a company undergoing rehabilitation or a workout, and an objection is not permitted.

Previously, a company that received a failing audit opinion could be granted an improvement period through an objection and maintain its listing until the next audit opinion was issued.

However, going forward, delisting will occur immediately upon a second consecutive occurrence, so the company must obtain an unqualified opinion in a re-audit or the next audit without fail.

As a result, the company's response time and improvement period have been greatly shortened, so a company that has received a failing audit opinion must devote its full effort to resolving the problem immediately.

Meanwhile, even if a failing audit opinion is resolved into an unqualified opinion in a re-audit or the next audit, the company becomes subject to a substantive review of its listing eligibility, so a separate review procedure to decide whether the listing is maintained is conducted.