FSS Urges Timely Auditor Appointments; Announces Online Briefing on Appointment System
Each year, approximately 5,000 companies are newly subject to external audit requirements, and the Financial Supervisory Service (FSS) has emphasized that these companies must designate their auditors within the required timeframe.
On April 10, the FSS announced that it will hold an online briefing session on the auditor appointment system for companies newly subject to external audit.
The session will cover criteria for determining which companies are subject to external audit, the parties responsible for auditor selection, and the procedures for appointment. It will also explain how to use the FSS's External Audit Contract Reporting System, which is used to report auditor appointments.
Companies subject to external audit include joint-stock companies and limited liability companies with total assets or annual sales of at least 50 billion won, and which also meet at least two of the following criteria: assets of at least 12 billion won, liabilities of at least 7 billion won, and sales of at least 10 billion won. Companies that are subject to external audit for the first time must appoint an auditor within four months from the start of the fiscal year and report to the Securities and Futures Commission of the Financial Services Commission within two weeks after signing the contract. Over the past three years, an average of about 5,000 companies per year have newly become subject to external audit.
To report the appointment of an auditor, companies must log in to the External Audit Contract Reporting System using their unique identification number and joint certificate issued by the electronic disclosure system (DART). Then, click the 'Company·Submission Documents' tab at the top of the screen, followed by the 'Auditor Appointment Report' on the left. Complete the overview section in the report and attach related documents. If revisions are needed, companies may upload them through the 'Resubmission' option.
The session can be viewed on the FSS YouTube channel as well as on the websites of the FSS, the Korea Federation of SMEs, and the Korea Trade-Investment Promotion Agency (KOTRA).
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An FSS official stated, "If the reporting obligation is violated, companies may face disadvantages such as an auditor being designated for them. We will work to prevent violations of external audit regulations by companies through various briefing sessions."
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