Lee Bok-hyun, Financial Supervisory Service Chief, Urges Accounting Firms to Maintain Audit Quality and Strengthen Internal Controls

Second Accounting Firm CEO Meeting Held Since Director Lee's Inauguration
Four Requests Delivered... "We Will Strive to Settle the New External Audit Act"

On the 6th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), urged, "Since the implementation of the new External Audit Act, the transparency of accounting in South Korea has been evaluated as improving. However, please continue to strive so that the accounting industry can guide sound corporate management based on trust."

Lee Bok-hyun, Governor of the Financial Supervisory Service, is speaking at the Financial Supervisory Service Governor-Accounting Firm CEO Meeting held at the Korean Institute of Certified Public Accountants in Seodaemun-gu, Seoul, on the morning of the 6th.
[Photo by Yonhap News]

Governor Lee held a 'Meeting with CEOs of Accounting Firms' at the Korean Institute of Certified Public Accountants at 10 a.m. that day and made this request. This meeting was the second since Governor Lee's inauguration, following the meeting held in September 2022. It was organized to share major issues related to accounting supervision and future supervisory directions, and to discuss ways to develop the accounting industry.

Governor Lee conveyed four requests. First, he asked accounting firms to continue efforts to maintain a high level of audit quality. He stated, "Although the auditor designation system has reduced market competition, the market's demand for audit quality has increased. Going forward, companies subject to designated audits will also be selected for financial statement reviews, so please strengthen your audit capabilities."

Next, he emphasized the need to strengthen internal controls at the accounting firm level to maintain the social trust of certified public accountants. Since fraudulent acts by accounting firms and their affiliated CPAs can instantly destroy trust in the accounting industry, he urged firms to make their best efforts to foster ethical awareness among their members.

He also highlighted that the digital transformation of domestic accounting firms has become an unavoidable task due to changes in the domestic and international audit environment, and stated that the FSS will actively support the successful introduction and utilization of digital audit technologies by accounting firms.

Lastly, he called for the establishment of reasonable audit work practices commensurate with the increased social responsibility of accounting firms, emphasizing the need to spread the implementation efforts of the 'Audit Work Practice Improvement Plan' prepared by the FSS and the four major accounting firms throughout the entire accounting sector.

Governor Lee said, "The FSS also plans to continue efforts to firmly establish the new External Audit Act, including faithfully implementing 'measures to optimize the auditor designation ratio' and other accounting system improvements."

Meanwhile, following Governor Lee's opening remarks, a professional review committee member from the FSS explained the progress of major issues related to accounting supervision to the attendees, and there was a free exchange of suggestions and opinions on current issues from related organizations and accounting firm participants. In response, Governor Lee stated that, as in the previous year, the matters discussed today will be actively reviewed and reflected in future supervisory work.

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