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|
 Overall
Audit System |
Under the External Audit Act, a corporation
must annually appoint an external auditor.
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The external auditor should be recommended by
the internal auditor and approved at the general
shareholders meeting.
， The external auditor, being a member of
the Korean Institute of Certified Public Accountants
(KICPA), must be independent of the
corporation and all of its affiliates.
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Generally, corporations with total asset exceeding
7 billion won as of the previous fiscal year-end,
are required to file audited comparative financial
statements. Audits are conducted according
to FSC-defined generally accepted auditing
standards. |
|
Various corporations are subject to audits by a CPA: |
， Corporations
filing registration statements with FSC
， Corporations filing an annual report with
FSC
， Corporations intending to list their securities
， Securities companies filing a business report
with FSC
， Investment advisory companies filing a business
report with FSC |
| Development
of Auditing Standards |
|
Since the mid 1970s, accounting principles
in Korea have been introduced in the form
of decrees and regulations by the Ministry
of Finance and Economy (MOFE). |
|
In January 1982, the Securities and Exchange
Commission (now FSC) issued the Financial
Accounting Standards (FAS), which were a consolidation
of all prior accounting rules and regulations.
They represented generally accepted accounting
principles applicable to all business enterprises
in Korea, including listed and non-listed
corporations and other entities. |
| Korean
Generally Accepted Accounting Principles (GAAP) |
|
The Korean GAAP, not unlike the U.S. GAAP,
cover all prior accounting rules and regulations
or the contain many provisions derived from
taxation principles. Special rules incorporated
in other laws and regulations and accounting
principles and methods established through
general practice will govern the accounting matters when FAS cannot
be applied. |
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The audited annual report of Korean corporations
must include; |
， Balance sheet
， Income statement
， Retained earnings statement
， Statement of changes in financial assets.
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