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I would like to request legal counsel regarding an accounting review.

I am the representative of a rapidly growing company. As sales have increased recently, I am facing an investigation by the Financial Supervisory Service over suspicions of accounting fraud. I am told that, among the Financial Supervisory Service's accounting reviews, I must undergo a detailed review, and that if things go wrong, there is even a risk of delisting. I would like to ask why I must undergo an accounting review and whether legal counsel from an attorney who is also a certified public accountant is available.

Accounting review

Answer

Published: 2025-04-11

Author : Kuk Il KIM

An accounting review refers to the act by which the Financial Supervisory Service oversees and manages whether a company has properly carried out its accounting audit in accordance with auditing standards.

The Financial Supervisory Service conducts accounting reviews of companies each year. As the market's demand for accounting transparency continues to rise and laws such as the Act on External Audit of Stock Companies have been fully revised, the financial supervisory authorities are enforcing accounting reviews under stricter standards.

If a charge of accounting fraud is recognized, then under a violation of the External Audit Act, a person is punishable by imprisonment for up to 10 years or a fine of not less than 2 times and not more than 5 times the profit gained or the loss avoided through the act. In addition, if accounting fraud is discovered, severe punishment cannot be avoided, and the violation may be publicly disclosed.

Through the collaboration of an attorney specializing in criminal law, an attorney who is also a certified public accountant, and certified public accountants, our firm assists with establishing advance response measures tailored to the client's case, confirming and reviewing responses to the Financial Supervisory Service's financial statement examination, and the overall response to the financial supervisory authorities' accounting review, including objections to accounting reviews and representation in administrative litigation.

We also provide legal counsel on civil and criminal litigation related to corporate accounting, as well as on responses to substantive listing eligibility reviews of listed companies. If you need help, we recommend that you consult with the attorney who is also a certified public accountant in our accounting review group.