Five-Way Race for Head of Accountants United in "Reform Completion"

May 17 Election, Record 5 Candidates
Chae I-bae "Accounting Reform Finalized"
Jeong Min-geun "Responsibility and Deregulation"
Choi Jong-man "Resolving Large and Small Business Conflicts"
Kim Young-sik "Promoting Unity and Coexistence"
Hwang In-tae "Strengthening Welfare Benefits"

[Asia Economy Reporter Ji-hwan Park] The election for the President of the Korean Institute of Certified Public Accountants (KICPA) is heating up like never before. With a record five candidates running, the final winner is expected to be decided on the 17th by the votes of 22,000 members. All candidates have put forward major pledges focusing on completing accounting reform, expanding the industry's scope of work, and promoting win-win solutions. Additionally, all candidates expressed opposition to increasing the number of newly certified accountants, which has risen by nearly 30% over the past two years.

In interviews conducted by Asia Economy on the 3rd, candidate Chae I-bae emphasized his determination to put a final stamp on accounting reform efforts. During the 20th National Assembly, Chae first proposed the "Periodic Auditor Designation System (6+3)," which allows companies to autonomously appoint external auditors for six years in nine-year cycles, followed by three years of designated auditors. He stressed, "There are already signs of regression in accounting reform from the business community, so close cooperation with the National Assembly and financial authorities is necessary to uphold the new external audit law." He also expressed his intention to work on legal amendments to expand the market for small and medium accounting firms. He explained, "To strengthen accounting transparency in public institutions, cooperatives, and other non-profit organizations and to expand the SME market, we will expand the standard time system and the designation system. As part of this, we plan to pursue business agreements with Seoul City and Gyeonggi Province to enhance accounting transparency for non-profit organizations."

Candidate Jeong Min-geun stated that the accounting industry should change to reduce the excessive responsibilities and regulations currently borne by accountants. In particular, he plans to push for legal amendments to reduce the statute of limitations for damages related to accounting audits from eight years back to five years. He said, "It is necessary to ease the excessive legal and administrative responsibilities imposed on external auditors. Since the types of responsibilities include civil, criminal, and administrative liabilities, we will work to eliminate these overlapping responsibilities." He also promised to strengthen the independence of the KICPA president by prohibiting the president from holding concurrent positions at other accounting firms or serving as outside directors. He emphasized, "Until now, the KICPA has functioned as a regulatory body at the request of supervisory authorities, but going forward, we will focus on gathering members' voices and conveying them to the government."

Candidate Choi Jong-man stated, "It is not enough for only the eldest brother to live well in a family; the younger siblings must also live well to avoid problems," highlighting the resolution of conflicts between large and small accounting firms caused by the implementation of the new external audit law as his top priority. Choi said, "With the introduction of the new external audit law, large accounting firms have improved their situation, but small and medium firms and audit teams have lost work," adding, "We will find ways for the industry to coexist." He also pointed out, "The current accountant remuneration system, which is based solely on audit contribution, is problematic," and pledged to establish remuneration standards suited to the realities of small and medium firms, as the current system fits only the Big 4. Choi also called for easing regulations such as the statute of limitations on auditors' liability for damages and fines. He noted, "The current statute of limitations for damages is eight years, but considering that the general commercial statute of limitations is five years, accountants bear an unusually heavy burden."

Candidate Kim Young-sik addressed recent disputes among small and medium accounting firms due to the introduction of the periodic auditor designation system, saying, "Instead of fighting over a small pie, we should focus on growing the pie itself," emphasizing, "I will work to expand the overall accounting industry's pie and promote unity and coexistence among accounting firms." He also stressed the importance of a stable conclusion to accounting reform. His pledges include establishing the standard audit time system, expanding and strengthening the periodic and discretionary designation systems, broadening the scope of external audits for joint-stock companies and limited companies, and early implementation of consolidated internal accounting management audits. In this process, he promised to utilize a broad network including industry, politics, academia, and the media to communicate with companies, large, medium, and small accounting firms, and supervisory authorities.

Candidate Hwang In-tae pledged first to reduce the number of newly certified accountants and to introduce flexible working systems suited to the audit market, such as part-time work at the association level for members on leave. He particularly emphasized support for litigation through the establishment of a litigation committee. He pointed out, "Lawsuits against accounting firms increased from 81 cases and 297.4 billion KRW in 2016 to 120 cases and 778.6 billion KRW in 2018," adding, "Since the statute of limitations for damages was extended from three to eight years, an increase in lawsuits is inevitable." To help firms with little litigation experience respond effectively, he stressed the establishment of a litigation expert committee at the association level to provide swift and organized support. He also promised welfare benefits such as welfare cards and housing purchase loans.