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Strengthened Financial Fraudulent Inspections: The Financial Supervisory Service’s New Plan
The Financial Supervisory Service (news.sbs.co.kr)

To prevent serious accounting scandals, the Financial Supervisory Service (FSS) decided to strengthen its supervision of companies with a high risk of accounting fraud and announced the 2022 Accounting Screening and Inspection Operation Plan on March 27th. As economic uncertainty continues, companies confronted with performance deterioration are more likely to commit accounting fraud. Therefore, the FSS plans to inspect financial statements for 180 companies, which is nine more than last year. Under the great principle of strengthening surveillance and conducting strict inspections, they will select companies at high risk of fraudulent accounting and quickly supervise when the suspicion is detected. With the toughened sanctions, companies that intentionally violate accounting rules have to pay up to 20% of fraudulent accounting costs with fines. To facilitate the Internal Accounting Control System, the FSS will also check the entire business, such as the internal control system and operation evaluation. In addition, 17 accounting firms are going to be supervised. The FSS plans to strengthen the inspection for important audit procedures and support accounting firms to improve their audit quality; if they omit those procedures without a reasonable reason, the FSS will take strict measures. The FSS emphasized the effectiveness of supervision through severe sanctions, saying, “We will strengthen preventive supervision and curb accounting fraud to establish order in the capital market.”

김다빈  bin8348@g.skku.edu

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