'Reduction of Uncollected Debt Information'... Financial Supervisory Service Checks Inadequate Disclosures in Last Year's Business Reports

Insufficient Information on Allowance for Doubtful Accounts, Inventory, and External Audit
Public Explanation Session for Business Report to be Held on the 23rd

The Financial Supervisory Service (FSS) identified numerous cases where information on allowance for doubtful accounts and significant external audit details were not properly recorded during the review of financial matters in the disclosed 2023 business reports. In the review of non-financial matters, many cases failed to adequately explain the reasons for discrepancies between the planned use and actual use of procured funds.

The FSS announced on the 8th that it selected 258 companies that submitted 2023 business reports and had multiple deficiencies found in the previous year to conduct a focused review of financial matters, resulting in these findings.

The main deficiencies included ▲ information on allowance for doubtful accounts and inventory ▲ significant matters related to external audits ▲ discussions between internal audit organizations and external auditors.

In 2022, deficiencies were found in the names of accounting auditors, audit opinions, emphasis of matter, and key audit matters, but the 2023 business reports showed prominent deficiencies in allowance for doubtful accounts and external audits. Deficiencies in recording inventory information continued to occur in 2023 as well.

Many deficiencies were also found in the review of non-financial matters. The FSS reviewed 112 securities-issuing corporations that had past deficiencies in 2023.

The FSS pointed out that many cases failed to record reasons for discrepancies between the planned use and actual use of procured funds, or did not specify the concrete storage methods and future plans for unused funds. There were also cases where amounts were not separated by the purpose of fund use.

Meanwhile, the FSS will hold a "Disclosure Briefing on Business Report Review Results" for corporate disclosure officers at 3 p.m. on the 23rd in the main auditorium of the FSS headquarters in Yeouido.

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