Notification and adjustment tasks for designated auditors unified under the 'Junggi Accounting Support Center'

Financial Services Commission Announces Upcoming Changes to External Audit and Accounting Regulations

Financial Services Commission

The reception of reports on unfair practices by designated auditors and the autonomous dispute mediation tasks will be unified under the neutral organization, the 'Small and Medium Business Accounting Support Center.' Additionally, if parties unreasonably reject the autonomous mediation plan prepared by the 'Autonomous Dispute Mediation Council,' a recommendation for cancellation of designation can be made to the Financial Supervisory Service.

The Financial Services Commission announced on the 22nd a notice of regulatory changes regarding the partial amendment of regulations on external audits and accounting (Amendment to External Audit Regulations) containing these provisions.

According to the regulatory changes, the Exchange (Small and Medium Business Accounting Support Center) will establish the 'Autonomous Dispute Mediation Council' to handle dispute mediation tasks arising from unfair practices by designated auditors. The Autonomous Mediation Council will propose autonomous mediation plans, and if auditors unreasonably reject the mediation plan, a recommendation for cancellation of designation can be made to the Financial Supervisory Service.

Furthermore, the Small and Medium Business Accounting Support Center will support the performance of valuation services for small listed companies with assets under 100 billion KRW.

In addition, various institutional improvements will be promoted to facilitate the smooth operation of accounting supervision systems such as financial statement reviews and accounting audits. The basis for initiating financial statement reviews for designated audit firms with a high risk of accounting fraud will be clarified, and a new basis for requesting data submission from companies subject to financial statement reviews will be established.

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