Legal Q&A
Q
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I am a shareholder of a certain company. Recently, that company was delisted. So the shareholders are joining together to pursue a class action on charges of breach of trust, accounting fraud, and stock price manipulation. In this regard, is it something I can ask a specialized attorney to handle the accounting analysis on my behalf? I would like to know what the litigation costs and procedures are.
accounting analysis
accounting
Answer
Published:
Author : Kuk Il KIM
Yes, in the situation you describe, accounting analysis can be handled on your behalf, and in particular, specialized analysis relating to accounting appraisal or accounting fraud is generally carried out through an accounting-focused attorney who collaborates with an accountant.
Breach of trust, accounting fraud, and stock price manipulation are subject not only to criminal liability but also to a civil claim for damages, and in order to prove such facts, a detailed analysis of financial statements, audit reports, notes, and disclosure materials is essential.
In other words, commissioning an analysis of financial statements for 'litigation purposes' is realistically possible, and it is a procedure ordinarily undertaken in many securities-related lawsuits.
A specific lawsuit involving accounting analysis proceeds as follows.
Collecting materials and commissioning accounting analysis → filing a criminal complaint or a civil claim for damages → the court's examination of evidence and appraisal → a judgment awarding compensation or a conciliation procedure
Litigation costs vary depending on the attorney's retainer (initial fee plus success fee) and the cost of the accounting appraisal, and when pursued as a class action, the individual cost burden may be reduced.
In addition, an accounting-focused attorney can accurately review and analyze a company's financial statements to clarify the facts, and can play an important role in enhancing accounting transparency and minimizing risk.
Because the actual cost varies depending on the scale of the litigation, the scope of analysis, and the attorney's fee standards, I recommend confirming an estimate and strategy in advance through a consultation with an accounting-focused attorney.

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Kuk Il KIM
T. 070-5117-2950
Experience as Chief Prosecutor at the Seoul High Prosecutors' Office · Attorney Specializing in Criminal Law/Drugs/Intellectual Property

YoungKon CHO
T. 070-7510-2014
Experience as Head of the Seoul Central District Prosecutors' Office · Attorney Specializing in Criminal Law/Sex Crimes/Drugs
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