Exemption from External Audit Obligations for Internal Accounting of Small Listed Companies... Political Affairs Committee Approves Amendment Bill

[Asia Economy Reporter Lee Jung-yoon] Going forward, external audits of internal accounting control systems will be exempted for listed companies with assets under 100 billion KRW.

According to the Financial Services Commission on the 5th, the National Assembly's Political Affairs Committee held a plenary session on the same day and passed a bill to amend the Act on External Audit of Stock Companies, etc.

Under the previous External Audit Act, listed companies with assets under 100 billion KRW were required to undergo external audits of their internal accounting control systems starting next year. However, most small-scale listed companies have simple business structures and relatively small transaction volumes, raising concerns that the compliance costs of external audits on internal accounting control systems outweigh the benefits.

However, even with the exemption of internal accounting control system audits for small-scale listed companies due to this amendment, reviews by external auditors must still be conducted as before.

This amendment is expected to significantly reduce the accounting burden on small and medium-sized enterprises, leading to cost savings in internal accounting system enhancement and external audit fees.

A Financial Services Commission official stated, "The amendment to the External Audit Act will undergo discussions in the Legislation and Judiciary Committee, be approved in the plenary session, and promulgated within this year, and will be enforced immediately after promulgation. The government plans to implement supplementary measures to ensure that the management of listed companies fulfills their accounting management obligations more thoroughly, thereby securing accounting transparency through the internal accounting control system."

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