Financial Services Commission, MOTIE
Act on External Audit of Stock Companies
(Background) The Financial Services Commission proposed measures to improve accounting standards to enhance transparency in accounting. An amendment bill of the Act on External Audit of Stock Companies was also proposed by a member of the National Assembly.
(Main issue) LLCs subject to external audit would have to comply with the disclosure policy regarding accounting audit and financial statements. Such excessive disclosure of material information would result in hampering the company’s business in Korea.
Resoultion and Results
(Resolution) Successfully cooperated with relevant government bodies and suggested regulatory improvements to the Regulatory Reform Committee to waive disclosure requirements for LLCs.
(Result) Suggestions regarding external audit of LLCs, such as the need to consider the number of their employees, sales and stakeholders before deciding on the subject of external audit and the scope of the accountant’s report, have been successfully applied to the Amendment of the Act on External Audit of Stock Companies.