Listed Companies with Assets Under 2 Trillion Won Get Relief... 5-Year Grace Period for Consolidated Internal Accounting

Enforcement Decree of the External Audit Act Passed at the Cabinet Meeting

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 promote a plan 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 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 for five years.

On the 13th, the Financial Services Commission announced that a partial amendment to the Enforcement Decree of the Act on External Audit of Stock Companies (External Audit Act), containing this provision, was approved at the Cabinet meeting and will take effect from the 19th.

This legal amendment formalizes the Financial Services Commission's announcement last June aimed at alleviating corporate accounting burdens. Accordingly, the introduction of consolidated internal accounting control systems for listed companies with assets under 2 trillion won will be delayed from the original 2024 to 2029, a five-year postponement. The internal accounting control system refers to the internal control system related to financial reporting that must be established to prepare and disclose reliable financial statements.

A Financial Services Commission official explained, "Due to the COVID-19 situation over the past three years and recent business downturns, the cost of establishing consolidated internal accounting control systems has become a burden for companies, leading to the decision to postpone the introduction."

The grounds for auditor designation by the authorities will also be partially relaxed. Among the previous grounds for designation was the "designation as an investment caution stock," which has now been abolished. This change was made in response to criticisms that this criterion imposed unnecessary burdens on companies despite having little correlation with the possibility of accounting fraud.

Additionally, the amendment includes strengthening the neutrality of the standard audit time deliberation body and designating the "Small and Medium Enterprise Accounting Support Center" within the exchange as a mediation body between designated auditors and companies. The exchange has also decided to support valuation service projects for small listed companies with assets under 100 billion won.

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