The Act on External Audit of Stock Companies has undergone numerous amendments since its enactment in 1981.
The latest amendment, which took effect on Nov. 1 this year, contains the most sweeping reform measures affecting all stakeholders in the accounting industry — companies, auditors and regulators – which could bring fundamental change to the accounting and audit practices in Korea.
In particular, the amended act aims to improve auditor independence, corporate accountability and regulatory control by implementing heightened accounting and audit regulations and standards.
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| Hyeongjoon David Choi (left) and Jung Hyun-suk |
First, the amended act expands the scope and compliance requirements of companies subject to an external audit.
Previously, as the name of the act suggests, only stock companies were required to perform an external audit. However, the act has been amended to also include limited liability companies.
Second, the amended act demands greater accountability and stronger…
