The Securities and Futures Commission Sanctions 3 Firms Including SSR for 'Accounting Standards Violations'

[Asia Economy Reporter Lee Jung-yoon] The Securities and Futures Commission under the Financial Services Commission announced on the 4th that it has decided to take disciplinary actions against three companies, including SSR, for preparing and disclosing financial statements in violation of accounting standards.

According to the Securities and Futures Commission, SSR, a KOSDAQ-listed company engaged in software development and supply, was found to have overstated sales by early recognition of product sales revenue from 2017 to 2019. They issued tax invoices and recognized sales early for transactions that did not occur through collusion with clients, resulting in overstated net income and equity.

Additionally, SSR was found to have overstated merchandise sales and cost of sales during the same period and violated disclosure requirements in the securities registration statement.

The Securities and Futures Commission imposed fines on SSR, designated auditors for three years, and recommended dismissal of two former CEOs and a former responsible employee. The company, the two former CEOs, and the former responsible employee were also reported to the prosecution.

Seoul Pharmaceutical, a KOSDAQ-listed pharmaceutical manufacturer, overstated net income and equity by recognizing false sales and cost of sales through issuing false tax invoices and maintaining duplicate inventory ledgers from 2016 to the first quarter of 2020. Obstruction of external audits was also detected.

The Securities and Futures Commission reported the company, two former CEOs, two former executives, and a former responsible executive to the prosecution. It also imposed fines, designated auditors for three years, and recommended dismissal of the former CEOs and former executives.

NSN, a KOSDAQ-listed manufacturer of computers and peripheral devices, overstated investments in subsidiaries’ stocks and loans. The Securities and Futures Commission imposed fines and designated auditors for one year on NSN. Additionally, Cheongdam Accounting Corporation, which audited NSN, was fined, required to contribute an additional 20% to the joint damage compensation fund, and restricted from auditing NSN for two years. One certified public accountant affiliated with the firm was restricted from auditing NSN for one year.

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