This article was published on Sept. 3, 2025, at 2:39 p.m. on the ChosunBiz MoneyMove site.
Choi Woon-yeol, chairman of The Korean Institute of Certified Public Accountants (hereinafter KICPA), presented the unification of accounting standards for the institutional sector and nonprofit sector as a core task during his remaining term and confirmed that KICPA has commissioned a second research project related to this. Since this is the only accounting policy included in the campaign promises of the Lee Jae-myung administration, KICPA plans to accelerate the legislative process.
According to the accounting industry on the 3rd, KICPA commissioned the Korean Commercial Law Association for the second research project regarding the establishment of the basic accounting law last July. Following this, the research began in August, and the plan is to complete it by December after a progress report in November, without extending into the next year. While the first research project, completed in the first half of this year, analyzed the basic framework and necessity of the accounting basic law, this time, it is expected to detail the drafting of specific legal provisions and identify the responsible departments. With this result, legislative initiatives such as proposing a bill in the National Assembly could be possible.
The accounting basic law is a law that stipulates universal principles applicable to the accounting of various organizations, regardless of the institutional sector or nonprofit sector.
Corporations, including businesses, are subject to the same application of Korean International Financial Reporting Standards (K-IFRS) and general corporate accounting standards under the Capital Market Act and the External Auditing Act, but this is not the case for nonprofit organizations. The accounting regulations law varies by sector, and the respective supervisory departments are different.
For example, public corporations follow the accounting standards for public corporations under the Inheritance and Gift Tax Act, medical institutions are subject to accounting regulations under the Medical Service Act, and private schools are governed by financial and accounting rules for private educational institutions under the Private School Act. Public enterprises and others follow the accounting practices for public corporations and quasi-governmental institutions as outlined in the Act on the Operation of Public Institutions, while local government private consignment businesses only have management guidelines from each local government without any legal basis.
Institutions with similar characteristics often have different detailed standards. Even within the second financial sector, savings banks and credit unions undergo annual accounting audits, whereas Saemaul Geumgo and NongHyup are audited every two and four years, respectively. Additionally, unlike savings banks that are disclosed in the electronic disclosure system, credit unions, Saemaul Geumgo, and NongHyup do not have disclosure obligations.
According to KICPA, countries such as Switzerland, Sweden, Belgium, China, and Taiwan have enacted separate financial accounting laws. These laws are similar to the accounting basic law in that they apply universally to all types of corporations engaged in commercial activities. While the United States, the United Kingdom, and Japan apply different accounting standards for the institutional sector and nonprofit sector, organizations above a certain scale are required to undergo external audits and maintain disclosure systems.
During a press conference marking his first anniversary in office last June, Choi Woon-yeol emphasized, "To establish and enforce a systematic and consistent accounting policy at the national level, the accounting basic law is necessary," and noted, "I will complete legislative support within my term."