The Financial Supervisory Service (FSS) will conduct audit and inspection activities this year targeting 160 listed companies and 10 accounting firms. In particular, it plans to strengthen accounting audits before and after initial public offerings (IPOs) and proactively review companies showing signs of being at risk. If multiple violations of the fiscal year are confirmed, the FSS will also push for increased fines.
On the 27th, the FSS disclosed the "2025 Financial Supervisory Service Accounting Audit and Inspection Operation Plan" containing these details. The number of companies subject to financial statement audits and inspections this year remains the same as last year at 160. The number of accounting firms subject to inspection has been reduced from 14 last year to 10 this year.
The 160 companies subject to inspection include not only listed corporations but also unlisted financial companies and those required to submit business reports. Minor violations will be promptly closed with caution or warnings, which are light measures by the FSS Governor, while efforts will focus on cases of high economic and social importance. Specifically, sample audits will be selected based on key audit issues, signs of at-risk companies, companies scheduled for listing, and those not inspected for over 10 years. Additionally, companies found to have accounting error corrections, reports of accounting fraud, or other suspected violations during supervisory duties will be subject to suspicion review.
Auditor management for accounting firms will be conducted over 3 to 7 weeks by group: Group A with 1 firm, Group B with 5 firms, and Group C with 4 firms. The schedule for inspections will be notified in advance after selecting the inspection targets. The FSS explained, "To perform efficient inspections, we will focus on checking the weak points of accounting firms identified during previous auditor inspections," and added, "We will maintain close cooperation with the Public Company Accounting Oversight Board (PCAOB) for unlisted companies and domestic accounting firms during joint inspections."
The FSS has set the basic directions for accounting audit and inspection work this year as ▲ establishing a sound market order through thorough audits and inspections ▲ enhancing the effectiveness of audits and inspections through improvements in the overall environment and system ▲ advancing accounting supervision by reforming auditor inspection and sanction methods. The thematic audit issues for this year are revenue recognition, valuation of non-marketable assets, related party transactions, and accounting treatment of virtual assets.
First, the FSS will expand on-site investigations for important cases and strengthen internal review procedures for cases requiring moderate measures. It will also expand audits of companies planning IPOs to prevent companies that inflate their value through accounting fraud from entering the capital market. Audits will also be strengthened for companies whose stock prices and performance sharply decline immediately after listing and for companies showing signs of being at risk.
Alongside this, the FSS plans to improve the system by building a next-generation inspection system and pushing for increased fines for violations spanning multiple fiscal years. Separate measures will also be prepared for long-term backlog cases.
Finally, the FSS will reform inspection methods by differentiating the regular inspection cycle (3 to 5 years) based on each accounting firm’s market influence and quality control level. It will continue to check integrated management systems, which are weak points for small and medium-sized accounting firms, and strengthen internal control supervision by sharing major violation cases.
The FSS emphasized, "Through meticulous accounting audits and inspections, we will enhance the transparency and reliability of accounting information and establish an advanced capital market."
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