Korean Institute of Certified Public Accountants Hosts the 5th ESG Certification Forum

The Korean Institute of Certified Public Accountants (KICPA) announced on the 19th that it held the '5th ESG Certification Forum.'

The ESG (Environmental, Social, and Governance) Certification Forum has been hosted by KICPA, an institution of audit and certification experts, since last year with the purpose of contributing to enhancing the transparency and reliability of ESG information. The forum held on the 15th was conducted under the theme "The Impact of ESG Information Disclosure on Audit - Focusing on the Necessity of Introducing the Revised International Standard on Auditing (ISA) 720."

In the keynote presentation, Professor Lee Young-han of the University of Seoul discussed the impact of ESG information, such as climate change, on financial statements and their audits, the role of financial statement auditors under the revised ISA 720 when ESG information is disclosed in business reports, and the necessity of introducing the revised ISA 720 domestically. The ISA 720, revised in 2015, requires auditors to check for significant inconsistencies between the financial statements and "other information" outside the financial statements in the business report and to report any material misstatements of other information in the audit report.

During the comprehensive discussion, Lee Dong-geun, Quality Control Director at Han Young Accounting Corporation, stated, "The introduction of the revised ISA 720 is expected to strengthen the reliability of other information such as ESG." He added, "With the 2019 amendment to the Commercial Act advancing the submission schedule of business reports to before the shareholders' meeting, many obstacles to adopting the revised ISA 720 have been largely resolved. Considering the future mandatory disclosure of ESG information, it is necessary to promptly introduce and establish the revised ISA 720."

Hwang Bo-hyun, auditor at i-SENS, said, "Since the scope of other information under the revised ISA 720 includes both financial and non-financial information, it needs to be further specified, and the auditor's responsibility for other information such as ESG may be expanded and intensified." Ko Eun-hae, head of Sustainvest, stated, "It is necessary to cultivate specialized personnel responsible for ESG in companies through relevant education, and auditors need to improve their expertise to analyze and review ESG information."

Additionally, Professor Oh Myung-jeon of Sookmyung Women’s University said, "I fully agree that the introduction of the revised ISA 720 is necessary considering the transition of ESG to statutory disclosure." However, she suggested, "Since the scope of business reports is very broad, it is necessary to consider limiting the scope of other information to ESG information, etc., in the early stages of introduction." Yoon Ji-hye, team leader at the Financial Supervisory Service, said, "Discussing the necessity of introducing the revised ISA 720 is a very meaningful process in terms of enhancing the reliability of ESG information." She added, "If the revised ISA 720 is introduced, auditors are expected to play an important role when ESG information is linked to financial information such as asset impairment and provisions."

KICPA plans to continue various activities to enhance the reliability of ESG information, including proceeding with the introduction process of the revised ISA 720.

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