Securities and Futures Commission Designates Auditor for Hanju ART Over "Three Years of Revenue Overstatement"

Hanju ART was sanctioned with the designation of an auditor after violating accounting standards by overstating its revenue and cost of sales for three years.

Yonhap News Agency

At its 18th meeting on October 14, the Securities and Futures Commission, under the Financial Services Commission, approved a three-year auditor designation for Hanju ART for preparing and disclosing financial statements in violation of accounting standards. The company’s former CEO and three others were reported to investigative authorities.

According to the Securities and Futures Commission, from 2021 to 2023, Hanju ART overstated its revenue and cost of sales using false tax invoices. It also obstructed the auditor’s external audit by submitting falsified accounting books and transaction records as audit evidence and presenting another company’s inventory as its own.

Jeongjin Serim Accounting Corporation and Seonjin Accounting Corporation, which failed to properly audit Hanju ART, were each ordered to make an additional 20% contribution to the joint compensation fund and barred from auditing Hanju ART for two years. Certified public accountants at each firm were barred from auditing Hanju ART for one year, barred from auditing designated companies for one year, and required to complete six hours of professional training.

Jeongjin Serim Accounting Corporation reportedly failed to perform adequate audit procedures related to Hanju ART’s revenue overstatement in 2021, while Seonjin Accounting Corporation did so in 2022 and 2023. As a result, they did not adequately reflect the accounting-standard violations in their audit opinions.

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