Choi Jong-koo, chairman of Financial Services Commission, speaks in front of accountants at a forum organized by The Korean Institute of Certified Public Accountants on Friday. [Photo provided by Financial Services Commission]
South Korean authorities will toughen scrutiny on corporate books to prompt remedial actions before problems can cause harm to the market and investors, top financial policy chief said. Friday
Regulators will closely examine the disclosed statements and alert companies to make corrections so that they need not go under scrutiny and review later after causing damage to investors, Choi Jong-koo, chairman of Financial Services Commission (FSC) told a forum organized by the Korean Institute of Certified Public Accountants.
His comment comes amid an ongoing probe on Samsung BioLogics for possible accounting wrongdoings, news that caused a 15 percent plunge in the stock.
The proposed system will allow companies to modify any accounting errors in a timely manner and help lessen risk and damages to investors, Choi said.
The commission is drawing revisions to outside auditor regulations to incorporate the changes.
The government meanwhile is doing its utmost for the smooth transition to tougher accounting rules of the International Financial Reporting Standards (IFRS).
The government warned of tougher penalties for accounting irregularities and ensured the process will be transparent and fair by seeking outside expertise on major issues.
The adversary system was first applied at a hearing held by Securities and Futures Commission under the FSC on an audit review of Hanjin Heavy Industries Co. last month. The system calls for both regulating entity and target to appear at a hearing and represent their position. The system is also expected to be applied to the latest alleged accounting fraud case involving Samsung Biologics Co.
By Jin Young-tae and Lee Eun-joo
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