What disadvantages occur if a company refuses to provide requested materials during an accounting audit?

If a company does not cooperate with an accounting audit without justifiable reason, legal liability may arise under the "Act on External Audit of Stock Companies, etc."

In addition, refusing, obstructing, or evading requests from auditors, controlling companies, the Financial Supervisory Service, or the Securities and Futures Commission to inspect books and documents, submit materials, or undergo investigation is also subject to punishment.

Even if you do not explicitly express refusal, acts such as delaying material submission, selectively providing only some materials, or repeatedly failing to comply with investigation schedules can also be evaluated as substantive obstruction of the audit.

If such violations are recognized, not only the company but also executives and employees in charge of accounting work, persons involved in audit-related work, and individual management may be subject to punishment, and imprisonment of up to 3 years or a fine of up to 30 million won may be imposed.

In addition, the fact of refusing an accounting audit is highly likely to lead to supervision and additional investigation by financial authorities, which can adversely affect administrative sanctions, declines in corporate trust, and overall future fundraising and business activities.

Therefore, when receiving an accounting audit or material submission request, it is important to accurately review the scope of legal obligations and responsibilities and then establish a systematic response strategy.