Korean Institute of Certified Public Accountants Announces Finalization of Revised Standard Audit Hours Regulation

Effective from next year... "Considering Regulatory Amendments and Changes in Audit Environment"

The Korean Institute of Certified Public Accountants announced the revised standard audit hours to be applied next year on the 1st.

According to the Korean Institute of Certified Public Accountants on that day, the Standard Audit Hours Deliberation Committee reviewed the public hearing proposal on the 16th of last month and unanimously finalized the revision. The External Audit Act requires reviewing the validity of standard audit hours every three years, reflecting the results, and making them public.

This revision reflects changes in regulations and allows for audit hours to be calculated according to the characteristics of companies, considering changes in the audit environment. First, the criteria for large unlisted companies were raised from assets of 100 billion KRW or more to 500 billion KRW or more. Additionally, the review time for internal accounting control systems can be adjusted, and recent regulatory changes such as exemption from internal accounting control system audits for listed companies with individual assets under 100 billion KRW were incorporated.

In particular, to enhance audit efficiency, factors such as integrated audits, learning effects, and digital audit effects can be considered. The individual characteristics of companies are also reflected, allowing additional consideration of high-risk accounts such as investment stocks, in addition to inventory and accounts receivable.

Meanwhile, considering the difficulties faced by companies due to the economic recession, the phased application rate will be maintained at the same level as in 2021 next year. The application rate after 2026 will be separately reviewed in the second half of next year.

This revision was prepared through research commissioned by the Korean Accounting Association and by gathering opinions from stakeholders such as companies and accounting firms. The Institute of Certified Public Accountants plans to announce the revision and collect opinions until the 21st of this month.