Securities and Futures Commission Designates Auditor for Three Years for Hanchang and The Technology over Accounting Violations

Financial authorities have designated auditors for two companies that violated accounting standards.

Daeyoung Kwon, Chairman of the Securities and Futures Commission (Vice Chairman of the Financial Services Commission), is speaking at a regular meeting held on August 27, 2025, at the Government Seoul Office in Jongno-gu, Seoul. Photo by Yongjun Jo

The Securities and Futures Commission under the Financial Services Commission announced on May 6 that, at its 9th meeting, it decided to designate an auditor for three years for Hanchang, which prepared and disclosed financial statements in violation of accounting standards. The Hanchang corporation, along with its former CEO and former executives, have been referred to the prosecution.

According to the Securities and Futures Commission, Hanchang overstated its sales and cost of sales for the years 2021 and 2022, and failed to disclose in the notes the guarantees provided for liabilities that should have been paid by partner companies. Additionally, Hanchang used financial statements that violated accounting standards in its securities registration statement.

Induk Accounting Corporation, which was Hanchang's auditor and neglected its audit procedures, was ordered to make an additional contribution of 30% to the joint compensation fund, among other measures. Two certified public accountants from Induk Accounting Corporation were each ordered to undergo 4 hours and 6 hours of job training, respectively.

Induk Accounting Corporation failed to reflect Hanchang's violations of accounting standards regarding sales and cost of sales for 2021 and 2022 in its audit opinion due to negligence in audit procedures.

The Technology, which also prepared and disclosed financial statements in violation of accounting standards, has been designated an auditor for three years, among other measures. The Technology corporation, along with its former CEO and former executives, have been notified to the prosecution.

The Technology falsely recorded sales of goods and cost of sales for the years 2021 and 2022 and used financial statements that violated accounting standards in its small-scale public offering disclosure documents. Furthermore, in an attempt to conceal fake product distribution sales, the company failed to submit performance guarantees received for fictitious sales transactions and disguised the collection of accounts receivable, thereby interfering with the auditor's external audit.

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