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Legal Intellectual

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Q

I have been charged with a violation of the Financial Investment Services and Capital Markets Act through accounting fraud.

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I have been charged with accounting fraud in violation of the Financial Investment Services and Capital Markets Act, on the allegation that I committed window-dressing accounting to avoid capital erosion while running the company. Looking at the content of the complaint, I am at risk of being punished on the ground that I distorted the financial condition by manipulating accounting information through the overstatement of sales. I did not gain any money through accounting fraud in the accounting process, and I feel this is unfair, so I would like to ask what the punishment for a violation of the Financial Investment Services and Capital Markets Act is, and whether I can obtain advice on accounting supervision.

Financial Investment Services and Capital Markets Act

accounting fraud

A

Answer to Related Inquiry

If a person violates the Financial Investment Services and Capital Markets Act by falsely preparing business reports and financial statements through accounting fraud, they are punished, in accordance with the Financial Investment Services and Capital Markets Act, by imprisonment for up to 5 years or a fine of up to 200 million won.

In addition, under the Act on External Audit, if a person violates the accounting standards and falsely prepares and discloses financial statements, they are punished by imprisonment for up to 10 years or a fine of at least twice and up to five times the profit gained or the loss avoided through the violation.

Our firm conducts detailed supervision through the collaboration of attorneys specializing in accounting and certified public accountants.

If the causal relationship between the window-dressing accounting and the benefit cannot be proven, the charge of violating the Financial Investment Services and Capital Markets Act cannot be applied.

For this reason, proving that issue can be an important key to resolving the case.

In the case of a violation of the Financial Investment Services and Capital Markets Act, because it is a crime that can result in criminal punishment, it is important to establish and argue the absence of the charge at the early stage of the investigation.

The accounting supervision group of our firm, with respect to demanding matters such as corporate accounting and finance, has many experts, such as attorneys specializing in accounting supervision and certified public accountants, work together to accurately analyze and diagnose the situation of the client company.

If you are afraid of criminal punishment after being charged with accounting fraud, we hope that you undergo accounting supervision and prove the absence of causation to free yourself from the unfair charge.

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