A total of 179 cases of accounting fraud were reported last year. Most of the whistleblowers were insiders who were well aware of the company's circumstances.
The Financial Services Commission noted that the number of reports has increased more than twofold from 81 in 2019, the year the accounting fraud reporting system was introduced, to 179 in 2024. During the same period, the number of reward payments increased from 1 to 7. Last year, the total amount of rewards paid was 407 million won. As of May this year, 72 reports have been received.
When the government receives a report, it determines the level of sanctions through financial statements review and inspections by the Financial Supervisory Service, the Korean Institute of Certified Public Accountants, and resolutions from the Securities and Futures Commission. Once the sanctions are confirmed, rewards are given to the whistleblower.
The Financial Services Commission reported that the quality of accounting fraud reporting is also improving. Whistleblowers are submitting detailed evidence related to violations of the company's accounting standards and more cases are being reported where they appear directly before the Securities and Futures Commission to present specific circumstances.
Whistleblowers for accounting fraud consisted primarily of insiders, such as executives and employees who are well aware of the company's internal circumstances, accounting for 65%. They were followed by clients (15%), shareholders (10%), and affiliates (5%).
The Financial Services Commission stated that it is taking strict measures against accounting fraud reports. In particular, about 75% of the accounting fraud cases uncovered through reports have received severe disciplinary actions corresponding to 'intentional or gross negligence.' The total amount of penalty surcharges levied is 24.87 billion won.
The personal information of whistleblowers is protected under relevant laws. Disclosing or reporting the personal details of a whistleblower to others will result in a fine of up to 50 million won. Individuals who impose disadvantageous treatment on a whistleblower may face criminal penalties (imprisonment of up to 2 years or fines of up to 20 million won) along with fines.
The Financial Services Commission said, 'In the future, we will conduct prompt investigations and actions regarding reports of accounting fraud in collaboration with relevant agencies, and rewards will be given to whistleblowers who contribute to the detection and handling of accounting fraud.' It also urged, 'If you become aware of any accounting fraud within corporations, please actively report it to enhance accounting transparency.'