A criminal complaint has been filed against me on suspicion of accounting fraud, and I would appreciate a response from an attorney specializing in accounting matters.

Accounting fraud is a concept that encompasses both window-dressing accounting and negligent auditing, and it refers to a company preparing financial statements falsely in violation of corporate accounting standards.

In this process, the manipulation of the books inevitably occurs.

Window-dressing accounting lowers external investors' confidence in a company, and by falsely making a company's management condition appear favorable, it can cause harm to businesses associated with the company.

The Financial Supervisory Service conducts supervisory examinations of companies every year, and when accounting fraud is discovered, a person who has committed accounting fraud by creating fictitious sales that do not exist may be subject to the Financial Investment Services and Capital Markets Act, the Act on External Audit of Stock Companies, and the Criminal Act, and may receive heavy punishment.

The Act on External Audit of Stock Companies (under the External Audit Act, when an auditor or an affiliated certified public accountant prepares an audit report falsely, it provides that there shall be imposed imprisonment of not more than 10 years, or a fine equal to the profit gained or the loss avoided through the violation (unjust enrichment) of not less than two times but not more than five times.

For clients who are facing a police investigation on suspicion of accounting fraud, our firm's attorneys specializing in accounting matters and accountants collaborate to form a dedicated case team, review the actual materials, establish a defense strategy, and provide legal counsel.

Recently, the Financial Supervisory Service has continued to strengthen its monitoring in relation to accounting fraud cases.

If you are investigated on suspicion of accounting fraud, you may be subject to an administrative disposition against the company as well as criminal punishment, so we encourage you, even before the case is formally booked, to establish in advance a strategy favorable to yourself in relation to the accounting fraud allegations and to respond accordingly, through the legal counsel of an attorney specializing in accounting matters and an accountant.