Securities and Futures Commission Designates External Auditors for Ascendio and Uiwang Baegun Project Finance Investment over Accounting Standards Violations

Ascendio, Uiwang Baegun Project Finance Investment, and Myungga Dairy Products have been subject to measures such as the appointment of external auditors by financial authorities for violating accounting standards.

On June 24, the Securities and Futures Commission of the Financial Services Commission held its 12th meeting and decided to designate an external auditor for Ascendio for three years as the company had prepared its financial statements in violation of accounting standards. The former chief financial officer was recommended for dismissal.

According to the Securities and Futures Commission, Ascendio failed to reflect 29.5 billion won in impairment losses on investments in subsidiaries in its 2019 financial statements.

Tae Yul Accounting Corporation, which neglected its audit of Ascendio, was ordered to make an additional 50% contribution to the joint compensation fund and is restricted from performing audit work for Ascendio for three years. One certified public accountant at Tae Yul Accounting Corporation received a four-year restriction from auditing Ascendio and a one-year restriction from auditing listed companies, designated companies, and large unlisted companies.

The Commission also imposed a one-year external auditor designation on Uiwang Baegun Project Finance Investment for preparing financial statements in violation of accounting standards. It was found that, from 2019 to 2023, the company failed to recognize amounts that should have been classified as cost of goods sold and provisions for planned project expenses as assets and liabilities in the financial statements. Additionally, it was found to have incorrectly recorded acquisition tax for apartment complexes as inventory assets, and to have overstated certain planned project expenses, leading to overstatements of inventory assets and equity capital.

Daejoo Accounting Corporation, which neglected its audit of Uiwang Baegun Project Finance Investment, was ordered to make an additional 20% contribution to the joint compensation fund and is restricted from performing audit work for Uiwang Baegun Project Finance Investment for two years. Four certified public accountants at Daejoo Accounting Corporation received one-year restrictions from auditing designated companies.

Myungga Dairy Products was also found to have falsely recorded sales and accounts receivable, and was designated for external audit for three years. The company’s CEO was recommended for dismissal and suspended from duties for six months, while the former responsible staff member was also recommended for dismissal.

The Sonang Certified Public Accountant Audit Team, which failed to properly audit Myungga Dairy Products, was restricted from auditing the company for two years. Two certified public accountants received one-year restrictions from auditing Myungga Dairy Products, and were ordered to complete six hours and four hours, respectively, of job training.

This content was produced with the assistance of AI translation services.