I am told I am subject to an accounting audit, but what are the criteria?

An accounting audit is, literally, a procedure in which an external auditor examines and verifies whether a company's financial statements have been properly prepared.

Not every company undergoes an accounting audit; only companies that meet certain criteria become ‘subject to external audit,’ and it is legally mandatory for them.

These criteria are set under the Act on External Audit of Stock Companies and the Like, and, representatively, a company becomes subject to an accounting audit when it meets the following requirements.

Total assets of 12 billion won or more

Total liabilities of 7 billion won or more

Revenue of 10 billion won or more

100 or more full-time employees

A stock company that simultaneously meets two or more of these four items is subject to external audit and must undergo an external accounting audit.

In addition, these requirements are newly assessed each year based on the last day of the immediately preceding business year.

For example, if two or more of the above requirements were met as of the end of 2024, the company becomes subject to external audit in 2025.

However, if two or more of those requirements were not met as of the end of 2025, the company does not have to undergo an external audit in 2026.

In other words, once a company becomes subject to an accounting audit, it must undergo one every year, but whether it is subject to the audit can change each year.

For details, please confirm through a consultation with a specialized attorney.