The Financial Supervisory Service will conduct reviews and inspections of the financial statements of 160 listed companies and audits of 10 accounting firms this year.
The FSS announced on the 27th the '2025 Accounting Review and Inspection Work Plan' that includes this information.
First, the FSS stated that it plans to conduct reviews and inspections of a total of 160 companies, taking into account key initiatives, inspection staff, past performance results, and efficiency of review work. The subjects of review may change based on the number of accounting standards violations and the scale, nature, and impact of those violations.
Minor violations will be quickly resolved with FSS Director's actions (warnings or cautions), focusing on incidents with high economic or social significance.
In addition, key inspection accounting issues, signs of troubled companies, companies scheduled for listing, and other risk factors (high earnings manipulation risk indicators or incidents of embezzlement and breach of trust) will be selected as sample review subjects.
Companies that correct accounting errors (more than four times the amount of materiality or corrected three or more times in the past five years), report accounting fraud, or have violations found during other supervisory tasks will be selected as subjects for investigation.
Moreover, the FSS will conduct audits of a total of 10 accounting firms, considering factors such as past compliance with registration requirements, inspection cycles, and quality management level assessments. The schedule and details regarding the selection of audit subjects will be communicated in advance.
To ensure efficient inspections, there are plans to focus on the weaknesses of accounting firms identified during previous auditor inspections. Key inspection items include ▲ the operation of practical integrated management systems for personnel, funds, and accounting ▲ the establishment of performance evaluation and compensation systems in response to audit quality ▲ the effectiveness of governance systems, such as checks on the CEO ▲ the establishment of management systems to ensure reliability of audit hours ▲ and policies to comply with independence regarding the provision of non-audit services.
The FSS noted, 'We will maintain close cooperation during joint inspections with the U.S. Public Company Accounting Oversight Board for domestic accounting firms.'