Firms With Sales Exceeding 50 Bln Won To Face Independent Audit

The Cabinet on Tuesday passed a bill that requires firms with sales or assets exceeding 50 billion won (US$44 million) to carry out external audits, the financial regulator said.

SEOUL, (APP - UrduPoint / Pakistan Point News - 23rd Oct, 2018 ) :The Cabinet on Tuesday passed a bill that requires firms with sales or assets exceeding 50 billion won (US$44 million) to carry out external audits, the financial regulator said.

The revision of a law on external auditing, which will take effect from November next year, is aimed at deterring a repeat of major accounting scandals and further advancing the nation's accounting reform efforts, the Financial Services Commission (FSC) said in a statement.

So far, companies whose capital is divided into shares have been subject to external audits. But the revision requires limited liability companies to also carry out external audits, the FSC said.

Currently, a company's management has the right to appoint an independent auditor. The revision allows a company's internal audit organizations, such as the "statutory auditor" or the "audit committee," to appoint an external auditor.

Maximum fines against white-collar crimes will be increased, the FSC said. Financial authorities have planned to toughen rules on corporate accounting standards, in a move to regain investors' confidence at home and abroad.

Compared with other advanced nations, South Korea still lags behind in certain accounting standards, FSC officials said.