32,431 Companies Subject to External Audit Last Year... 3% Increase Compared to Previous Year

[Asia Economy Reporter Jihwan Park] The Financial Supervisory Service announced on the 22nd that the number of companies subject to external audits last year was 32,431, an increase of 958 companies (3%) compared to the previous year.

The growth rate of companies subject to external audits has been increasing annually, with 3.7% in 2015, 8.7% in 2016, 7.9% in 2017, and 7.6% in 2018. A Financial Supervisory Service official explained, "The growth rate declined due to the expansion of exemptions from external audits, such as securitization specialization companies."

Among the companies subject to external audits, there were 2,326 publicly listed corporations and 30,105 unlisted corporations, increasing by 96 and 862 respectively compared to the previous year.

By asset size, companies with assets between 10 billion and 50 billion KRW accounted for the largest portion at 20,893 (64.4%), followed by 3,958 companies (12.2%) with assets between 50 billion and 100 billion KRW, and 3,372 companies (10.4%) with assets between 100 billion and 500 billion KRW.

By fiscal year-end month, companies with December fiscal year-end accounted for an overwhelming majority at 30,572 (94.3%). This was followed by companies with March fiscal year-end at 605 (1.9%) and June fiscal year-end at 392 (1.2%).

The number of companies assigned auditors last year was 1,224, an increase of 535 companies (75.1%) compared to 699 companies the previous year. This included 331 companies scheduled for listing, 220 periodic assignments, 197 companies with operating losses for three consecutive years, 112 companies under management status, 108 companies with excessive debt ratios, and 66 companies without appointed auditors.

The increase in designated companies was found to be due to the new designation criteria under the new external audit law (an increase of 475 companies), the deemed designation system for companies scheduled for listing (an increase of 114 companies), and the increase in listed companies included in management status (an increase of 90 companies).

A total of 1,224 companies were designated for auditor assignment, with 92 accounting firms assigned. Among them, the four major accounting firms?Samil, Samjung, Hanyoung, and Anjin?were assigned to 454 companies (37.1%), an increase of 112 companies compared to 342 companies (48.9%) the previous year, but their share decreased by 11.8 percentage points.

This content was produced with the assistance of AI translation services.