The Financial Supervisory Service warned that it would take stern measures against obstructions such as submitting false materials or refusing to submit materials during external audits and inspections.
The Financial Supervisory Service reported on the 13th that there were four cases of corporations obstructing inspections and six cases of external audits since last year. Compared to zero cases of obstruction from 2019 to 2023 and an annual average of 2.6 cases of external audit obstruction, the number of detected cases has greatly increased.
External audits and accounting inspections are systems established to provide investors with accurate information about corporations. Obstruction of external audits involves hindering the auditor's requests for viewing, copying, or submitting accounting-related materials without justifiable reasons or submitting false materials. Obstruction of inspections refers to acts of refusing, hindering, or evading the Financial Supervisory Service's accounting inspection tasks, including failure to comply with requests for material submission, attendance, and testimony without justifiable reasons.
One corporation obstructed accounting inspections by submitting false materials in response to the Financial Supervisory Service's request for inventory-related materials. This corporation was discovered to have submitted falsified documents to cover up accounting violations such as overstatement of inventories. The Financial Supervisory Service imposed an additional penalty surcharge of 70 million won and filed a report with the prosecution.
Another corporation was fined an additional penalty surcharge of 220 million won after refusing the Financial Supervisory Service's requests for accounting materials and internal investigation reports, while submitting some materials late. The executive leading the obstruction of inspections has been reported to the prosecution.
Corporations that obstructed external audits were also identified consecutively. One corporation forged materials related to sales contracts and payment receipts when external auditors requested the submission of materials concerning sales and assets. It even repurchased products through special associates of trading partners and then disassembled the finished goods into new materials and supplies. The records of the inventories created this way were submitted to the external auditors and led to prosecution for obstructing the external audit.
The Financial Supervisory Service noted that it plans to announce cases of obstruction involving external audits and inspections through the Korean Institute of Certified Public Accountants, the Korea Listed Companies Association, and the Korea Securities Dealers Automated Quotations Association, and stated, 'We will strengthen data collection and analysis using digital inspection techniques and prevent or block obstruction acts in advance.'