This article was published on March 11, 2025, at 5:55 p.m. on the ChosunBiz MoneyMove site.
It has been determined that the Samjung Accounting Corporation has obtained the audit for the Korea Electric Power Corporation, the largest public enterprise released into the free retention market this year.
According to the investment banking industry on the 11th, the accounting audit for KEPCO for the fiscal years 2025 to 2027 was assigned to Samjung. KEPCO issued a request for accounting audit services through an electronic procurement system on January 31 and closed bid submissions at 2 p.m. that day. The estimated amount is 324,588,000 won. The estimated price is 295,080,000 won, and the base amount is 311,500,000 won.
KEPCO was a notable corporation in the external auditor market, which had many 'big fish' this year. As of the fourth quarter of 2024, its asset size reached approximately 246 trillion won. The previous auditor was Han-young Accounting Corporation, and it is reported that Samjung and Anjin Accounting Corporation were competing for this engagement. Samil, which is providing non-audit services, did not participate in the audit proposal due to independence issues. Public corporations must change auditors if they have received audits from the same accounting firm for more than seven years.
Unlike designated audit corporations assigned by the government, free retention allows accounting firms to compete for selection by corporations. Particularly this year marks the third instance of free retention since the introduction of the new external audit law in 2019, and competition among the four major accounting firms, including Samjung, Samil, Anjin, and Han-young, has been fiercer than in previous years. Last year, there were only six free retention target corporations with assets of over 2 trillion won, but this year that number has increased more than threefold.
Industry observers anticipate that the results of the latest free retention audit competition will impact industry rankings. The proportion of auditing revenue in total revenues for accounting firms is approximately 30-40%. For instance, Samjung was able to solidify its position as the second largest industry player recently, significantly influenced by winning the audit of Samsung Electronics, which was released two years ago as a free retention.
An industry insider noted, "Other corporations that entered the free retention market had their auditors determined at the end of last year and the beginning of this year, but interest was focused on KEPCO, which was delayed. Samjung relinquished its designated audit opportunity with Kia to Han-young, but is expected to have performed well in the audit sector by obtaining contracts with Hyundai Mobis, Naver, and SK Telecom, in addition to KEPCO."