Number of Listed Companies Revising Last Year's Audit Reports Increases by 35... Correction Frequency Up 34% Year-on-Year

[Asia Economy Reporter Lee Jung-yoon] The number of listed companies that corrected their audit reports last year increased by 35 compared to the previous year. The total number of corrections rose by 34.4%, with corrections to the main body of financial statements accounting for the largest portion.

According to the Financial Supervisory Service on the 26th, out of 2,487 listed companies as of the end of last year, a total of 160 companies corrected their audit reports. This corresponds to 6.4% of the total and is an increase of 35 companies (1.2 percentage points) compared to the previous year.

Additionally, the total number of corrections was 410, an increase of 105 (34.4%) from the previous year. Among these, corrections to the main body of financial statements accounted for 78%, the largest portion, followed by notes (14.6%) and the main body of the audit report (7.4%). In particular, corrections to the main body of financial statements increased by 63 compared to the previous year, and note corrections increased by 27.

Among the 160 listed companies that corrected their audit reports, the proportion audited by the Big Four accounting firms was 15.6%, down 7.6 percentage points from the previous year.

Among individual audit report corrections of listed companies, changes in audit opinions totaled 19 cases (15 companies), a decrease of 8 cases (5 companies) compared to the previous year. Changes from qualified or adverse opinions to unqualified opinions accounted for 94.7%, and there was also one case (one company) where the opinion changed from unqualified to qualified.

The average time taken from the initial disclosure of the audit report to the correction disclosure was found to be 18.5 months. Although this is not significantly different from 18 months in the previous year, it is considered long compared to the overall average of 9.5 months for all companies subject to external audits.

Expanding to companies subject to external audits, the number of companies that corrected audit reports including consolidated reports last year was 1,033, an increase of 6.3% compared to the previous year. This corresponds to 3.1% of the total 33,250 companies. The number of corrections was 1,500, an increase of 199 from the previous year.

A Financial Supervisory Service official stated, "Companies need to strengthen internal controls and financial statement preparation and verification procedures to prevent accounting errors, and promptly correct any accounting errors discovered after the disclosure of audit reports." The official added, "The Financial Supervisory Service will regularly monitor accounting errors and audit opinion corrections, reflect them in the evaluation of accounting firms' quality control levels, and take strict measures such as financial statement inspections if necessary."

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