Hyundai Motor's New External Auditor Appointed as EY Hanyoung

[Asia Economy Reporter Kwon Jae-hee] EY Han Young is expected to be selected as Hyundai Motor's new external auditor. This is interpreted as a result of Deloitte Anjin returning its auditor status for Hyundai Motor due to independence issues, following Samil PwC.

According to the accounting industry on the 30th, Anjin announced to the Financial Supervisory Service (FSS) its intention to return its designated auditor status due to a conflict of interest issue.

The periodic auditor designation system introduced in 2019 stipulates that if a company freely appoints an auditor for six consecutive years, it must have an auditor designated by the financial authorities for the next three years.

Although the FSS designates the auditor, if the designated auditor has independence issues such as conflicts of interest, it can return its status.

Anjin currently handles Hyundai Motor's internal accounting management system services and judged that this conflicts with audit independence.

Previously, Samil, which had received prior notice of auditor designation, also returned its auditor status due to its advisory role for Hyundai Motor.

The financial authorities reflected this and designated Anjin during the main notification, but Anjin also returned its designated auditor status due to independence issues.

The current External Audit Act stipulates that designated auditors for companies with assets exceeding 2 trillion won must be one of the Big Four accounting firms with excellent capabilities.

Since Samjong KPMG is currently handling Hyundai Motor's external audit, the only remaining firm among the four is Han Young.

Accordingly, the FSS plans to notify EY Han Young as the final designated auditor.

Meanwhile, the industry points out that the efficiency of the financial authorities' auditor designation process is declining.

This is because the financial authorities realistically cannot know all contract details between numerous companies and accounting firms.

An accounting industry official said, "It was already widely known in the industry that Anjin could not serve as Hyundai Motor's designated auditor due to independence issues," adding, "If the re-designation process continues to be prolonged, it may cause confusion in preparing contracts."