Fair Trade Commission to Establish "Financial Soundness Evaluation Indicators for Subscription Service Companies" in the First Half of This Year

[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission (FTC) has decided to establish a 'Financial Soundness Evaluation Index for Funeral Service Companies' within the first half of this year.

On the 30th, an FTC official stated, "Based on the results of the accounting indicators research project for the funeral service industry conducted last December, we are currently working on developing a financial soundness evaluation index for funeral service companies," adding, "We also plan to transparently disclose the evaluation results of each company accordingly."

First, the FTC sent an official letter recommending that external auditors of each funeral service company include sufficient financial information in their audit reports, specifically requesting that this be incorporated into the 2019 audit reports.

For an effective evaluation of the funeral service industry, the audit reports submitted by companies must contain accounting information that clearly reflects their financial status. However, currently, most funeral service companies submit audit reports solely to comply with the Installment Transactions Act, resulting in audit reports that do not provide adequate financial information.

According to the FTC, as of the end of December last year, there are 86 registered companies. There were no closures or new registrations during the fourth quarter of last year. The FTC assessed that the industry restructuring (closures, mergers, etc.) following the enforcement of the revised Installment Transactions Act earlier last year has entered its final stage.

With the restructuring of the funeral service industry nearing completion, business associations voluntarily protecting consumer rights have been formed and are actively operating. However, the FTC rejected the registration applications of two business associations?the Korea Funeral Service Industry Association and the Korea Funeral Service Industry Cooperative?citing inadequacies in their representativeness and feasibility of business implementation. The FTC plans to actively reconsider approval upon reapplication after reviewing efforts to strengthen representativeness as business associations and the establishment and execution of concrete business plans.

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