Accounting Industry Actively Supports Public Interest and Nonprofit Corporation Projects

Sam-il, Free Distribution of Accounting System 'Stars' Development
EY Hanyoung Launches Dedicated Team...Provides Various Services

[Asia Economy Reporter Park Jihwan] The accounting industry has launched support projects for small-scale public interest and non-profit organizations, where demands for accounting transparency are increasing. Considering the difficulties in establishing suitable accounting systems for public interest and non-profit organizations due to a lack of personnel and resources, they are either distributing self-developed accounting systems for free or engaging in pro bono activities.

According to the accounting industry on the 10th, Samil Accounting Corporation plans to develop the public interest corporation accounting system 'STARS' this month and distribute it for free to about 10,000 public interest corporations in Korea. STARS features the use of account titles and financial statement formats aligned with the public interest corporation accounting standards introduced in 2018, and it allows accounting treatment by distinguishing between public purpose projects and other projects. In particular, when common expenses such as labor costs are entered, they are automatically allocated according to the criteria set for each project and reflected in the financial statement calculations.

Samil's history of support for public interest corporations dates back 10 years. From 2009 to 2016, Samil delivered support funds worth tens of millions of won annually to public interest corporations through the Samil Transparent Management Awards ceremony. Since July 2016, it has been operating the industry's first 'Non-Profit Corporation Support Center' to provide systematic consulting for non-profit corporations.

EY Hanyoung also recently launched a 'Non-Profit Corporation Dedicated Team' considering the growing social demand for enhancing transparency in non-profit corporations. They plan to provide various services such as preparing tax confirmation statements for public interest corporations and filing corporate tax, withholding tax, and VAT correction claims for non-profit corporations to ensure that mandatory requirements are well complied with and operations are efficient. Related pro bono activities are also active. Hanyoung conducts 'pro bono' activities by donating the costs incurred after auditing public interest and non-profit corporations back to the related institutions.

The accounting industry's move to strengthen support for public interest and non-profit corporations is due to the recent social interest in the accounting transparency issues of these organizations, resulting in strengthened related systems and supervision in accounting, taxation, and disclosure.

However, from the perspective of small-scale public interest and non-profit corporations lacking personnel and resources, the cost burden of preparing settlement data and disclosure formats at the level required by the government and donors has been significant. Currently, among public interest corporations, more than 70%, about 7,100, are small-scale corporations with donation income below 100 million won. Among these, about 4,700 public interest corporations have zero donation income.

An accounting industry official said, "Even in large domestic accounting firms, there are not many experts related to public interest corporations due to profitability issues," adding, "As social interest in establishing transparency grows, various institutional supplements and support for training related experts should be activated."