FSS: 76 Violations of Pre-Audit Financial Statement Submission, Surging from Previous Year

Results of the 2024 Fiscal Year Pre-Audit Financial Statement Review

A total of 76 companies were found to have failed to submit pre-audit financial statements on time or to have omitted parts of them. This marks a significant increase from 52 cases in the previous year.

The Financial Supervisory Service (FSS) announced on September 3, 2026, that it had identified 76 violations of the obligation to submit pre-audit financial statements for the 2024 fiscal year. Specifically, there were 8 cases where no pre-audit financial statements were submitted at all, 29 cases where only partial financial statements were submitted, and 39 cases where the deadline was not met.

Among the violating companies, the FSS imposed a three-year auditor designation on one company, a two-year designation on another, and a one-year designation on seven others. In addition, 29 companies were issued warnings and 38 companies were given cautions.

The number of violations had been declining from 205 in the 2019 fiscal year to 52 in the 2023 fiscal year, but increased to 76 in the 2024 fiscal year. An FSS official explained, "We believe these violations resulted from lack of experience with regulations and misinterpretation of facts by those responsible."

As specific examples, Company A, an unlisted financial firm with assets of less than 500 billion won, did not fully understand the Act on External Audit of Stock Companies and mistakenly believed it was exempt from submission, and therefore did not submit its financial statements. Company B, which listed on the stock market during the year, misunderstood the requirements, believing there was no submission obligation since it was not a listed company in the previous fiscal year. Company C, which was required to submit, temporarily saved its individual financial statements on the submission day but mistakenly thought the documents had been officially submitted.

By company type, there were 33 violations among listed companies and 43 among unlisted companies. Listed company violations increased from 17 in 2023 to 33 in 2024, while unlisted company violations rose from 35 to 43 over the same period.

The obligation to submit pre-audit financial statements is a system designed to clarify the responsibility for preparing financial statements and to enhance the reliability of external audits. Listed corporations, financial companies, and unlisted companies of a certain size are required to submit pre-audit financial statements prepared directly by the company to the Securities and Futures Commission within the legal deadline.

In particular, all financial companies are subject to this obligation, regardless of their listing status or asset size. Large unlisted companies with total assets of 500 billion won or more as of the previous fiscal year's end are subject as well, as are companies that are designated to file annual reports or belong to disclosure-targeted business groups with total assets of 100 billion won or more.

For listed companies, if pre-audit financial statements are not submitted within the deadline, the reason must also be publicly disclosed. However, for the 2024 fiscal year, out of the 33 listed companies that violated the submission obligation, 29 did not disclose the reasoning for not submitting the statements. The FSS imposed corresponding measures and required submission of written statements from these companies for their failure to submit.

Furthermore, the FSS urged auditors to verify companies' pre-audit financial statements in accordance with audit practice guidelines and to evaluate whether internal control deficiencies exist in companies that violate the submission obligation.

An FSS official stated, "The pre-audit financial statement submission obligation system was introduced to clarify the responsibility for preparing financial statements and to reinforce the audit function of external auditors. We will strengthen the companies' ability to self-verify accounting errors and improve the reliability of accounting information and external audits through ongoing monitoring."

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