The Securities and Futures Commission imposes 110 million KRW in fines and penalties on Innowise for accounting standard violations
[Asia Economy Reporter Park Jihwan] Financial authorities have imposed sanctions, including fines, on three companies including Innowise for violating accounting standards.
The Securities and Futures Commission under the Financial Services Commission decided at its 9th meeting on the 6th to impose sanctions such as auditor designation and fines on three companies, including Innowise, which prepared and disclosed financial statements in violation of accounting standards.
According to the Securities and Futures Commission, Innowise did not conduct impairment reviews despite signs of impairment on subsidiary investment stocks in its separate financial statements. Additionally, it applied unreasonable assumptions when measuring recoverable amounts and failed to recognize impairment losses, resulting in an overstatement of subsidiary investment stocks. In January last year, it used the 2017 financial statements that violated accounting standards in a small public offering disclosure document.
Accordingly, the Securities and Futures Commission decided to impose a fine of 74.9 million KRW, a penalty of 36 million KRW, and a two-year auditor designation on Innowise. The auditor, Ankyung Accounting Corporation, was also sanctioned with a 50% additional contribution to the joint compensation fund and a three-year business restriction related to Innowise.
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The Securities and Futures Commission decided on a three-year auditor designation for KOSDAQ-listed company HB Technology, which falsely recorded accounts receivable due to fictitious asset sales. For the unlisted company LCTPFV, sanctions including a 12-month securities issuance restriction and a three-year auditor designation were imposed for falsely recording advance construction costs by entering into fictitious construction contracts and embezzling related construction expenses.
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