What should companies prepare for in the strengthened supervision of accounting fraud?

Financial authorities are recently strengthening preventive supervision and sanctions for high-risk companies for accounting fraud, such as frequent changes of major shareholders, negative opinions on internal accounting management systems, and cases of abuse of private CBs, as well as serious accounting fraud that has caused social controversy by being involved in embezzlement, breach of trust, and unfair trading.

In particular, by expanding full-scale audits of internal accounting management systems, they are foreshadowing strict responses, such as taking aggravated measures for those who violate these regulations.

This strengthened accounting fraud supervision policy is an important movement to preemptively block the risk of corporate accounting fraud.

Accordingly, companies should conduct thorough cause analysis and prompt correction of past accounting fraud errors.

It is very important to systematically organize control procedures so that repeated accounting fraud mistakes do not occur.

Also, it is necessary to establish a process that can continuously check compliance with internal accounting management regulations to preemptively block the possibility of legal violations, and to consistently make efforts to enhance accounting transparency.

If such preparation and management are inadequate, you must be aware that this can lead to severe sanctions from the Financial Supervisory Service audit results and serious disadvantages related to accounting fraud, such as decreased corporate trust.