Jeungseonwi Decides to Report E&Korea to Prosecutors for Accounting Standards Violations

[Asia Economy Reporter Eunmo Koo] The Securities and Futures Commission (SFC) under the Financial Services Commission has decided to take measures such as notifying the prosecution against E&Korea for preparing and disclosing financial statements in violation of accounting standards.

At its 17th meeting on the 16th, the SFC resolved to impose an 8-month restriction on securities issuance, a 2-year auditor designation, a recommendation to dismiss the CEO, and prosecution notification measures against the company and its CEO for preparing and disclosing financial statements in violation of accounting standards.

It was found that E&Korea falsely recorded sales and accounts receivable by issuing tax invoices and recognizing revenue in 2016 despite not delivering products such as carbon mask packs in 2017. Additionally, it was pointed out that the company overstated its equity capital by omitting accounts payable in the financial statements.

Furthermore, the accounting firm that audited the company's financial statements and violated auditing standards was subjected to an additional 30% contribution to the joint compensation fund and a 2-year restriction on audit work for E&Korea. Restrictions on audit work were also decided for two certified public accountants belonging to the firm.