The Securities and Futures Commission imposes fines and audit designation on Dobu Mask for violating 'Accounting Standards'

The 12th Securities and Futures Commission Action Resolution

The Securities and Futures Commission under the Financial Services Commission announced on the 28th that it has resolved to impose sanctions, including the designation of an auditor, on Dobu Mask for preparing and disclosing financial statements in violation of accounting standards.

On the 9th, officials were busy moving in the corridor of the Financial Services Commission at the Government Seoul Office in Jongno-gu, Seoul, where financial authorities decided to include mortgage loans (Judaemae) in the 'debt refinancing' infrastructure scheduled to be launched in May by the end of the year. Financial authorities explained that they aim to reduce the interest burden on mortgage loans by establishing a debt refinancing platform that allows users to compare loan interest rates across the financial sector at a glance and switch loans easily. Photo by Yoon Dong-ju doso7@

According to the Securities and Futures Commission, Dobu Mask, a textile product manufacturer, falsely recorded sales and cost of sales by disguising itself as a used mobile phone trading business during the fiscal years 2017 to 2019, issuing fabricated tax invoices, and temporarily writing off fabricated accounts receivable that remained uncollected after the business closure.

Additionally, the company falsely recorded goodwill related to the used mobile phone trading business and temporarily impaired it after the business closure. Furthermore, although the company received a tax assessment notice from the National Tax Service, it failed to record a provision for the related additional tax liabilities in the financial statements. In response, the Securities and Futures Commission resolved to impose sanctions including fines, a three-year auditor designation, recommendations for dismissal of the CEO and responsible executives, a six-month suspension of duties, and referral to prosecution.

Regarding two auditors, Mirip Accounting Corporation and another, who violated the Act on External Audit of Stock Companies by breaching auditor qualification restrictions, and two other auditors, Jin Accounting Corporation and another, who violated significant audit procedures while auditing financial statements of unlisted companies, the Korean Institute of Certified Public Accountants (Delegated Supervision Committee) resolved to take measures such as additional contributions to the joint compensation fund.

The fines against Dobu Mask and its related parties will be finally decided by the Financial Services Commission in the future.

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