Financial Services Commission Announces Legislative Notice for Amendment to Enforcement Decree of External Audit Act

On the 9th, officials were busy moving through 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 set to launch in May by the end of the year. Financial authorities explained that the purpose is to reduce the interest burden on mortgage loans by building a debt refinancing platform that allows users to compare financial sector loan interest rates at a glance and switch loans easily. Photo by Dongju Yoon doso7@

The introduction of consolidated internal accounting control systems for listed companies with assets under 2 trillion won will be postponed by five years, from 2024 to 2029.

On the 15th, the Financial Services Commission announced that it will publicly notify the amendment to the Enforcement Decree of the Act on External Audit of Stock Companies, which includes this content, until September 25.

However, listed companies with assets of 2 trillion won or more will implement the system as planned starting this year, but exceptionally, companies that apply for a postponement of the introduction of the consolidated internal accounting control system to the Financial Supervisory Service will be allowed a two-year postponement after review.

Companies wishing to postpone must submit an application for review (using a separate application form) to the Financial Supervisory Service’s external audit contract reporting system within the application period (September 1 to September 8), attaching the external auditor’s opinion letter.

To prevent abuse of the postponement, the Financial Services Commission and the Financial Supervisory Service will allow a two-year postponement (until the end of 2024 for companies with December fiscal year-end) only for companies that meet the review criteria after approval by the Securities and Futures Commission, and will require postponed companies to disclose the fact and reasons for the postponement in their business reports.

Additionally, the reason for auditor designation ex officio, "designation as an investment caution stock," will be abolished.

Furthermore, the neutrality of the Standard Audit Time Deliberation Committee will be strengthened. The number of ‘accounting information user’ members recommended by the Chairman of the Korean Institute of Certified Public Accountants (KICPA) (chairman) will be reduced from four to two (one of the two must be a recommended academic member), and the recommending institution will be changed from the KICPA chairman to the Financial Supervisory Service. This change considers the criticism that meetings and resolutions can be held without the attendance of the corporate sector (five members) with only the nine members appointed by the KICPA chairman (five from the accounting industry and four information users) and one member from the Financial Supervisory Service.

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