Financial Authorities Hold Briefing for Companies with Excellent Accounting and Audit Governance

Application for Periodic Designation Deferral to Begin in June

The Financial Services Commission and the Financial Supervisory Service announced on April 28 that they had held a corporate briefing session ahead of the implementation of the "Periodic Designation Deferral System for Companies with Excellent Accounting and Audit Governance."

Jointly hosted with the Korea Listed Companies Association, the Kosdaq Association, and the Korea ESG Standards Institute, the session aimed to introduce the background of the new system, detailed evaluation criteria, and application procedures. It also provided answers to questions received from companies in order to enhance corporate understanding. Participants on site showed keen interest, raising questions about the specific application of the evaluation criteria, terms of audit committee members, audit contract cycles, and the standards for exceptions in cases where it is difficult to immediately meet the criteria.

Choi Jonghak, professor at Seoul National University and inaugural chair of the Accounting and Audit Governance Evaluation Committee, stated, "To prevent conflicts of interest or distortion of evaluations, we will strictly enforce exclusion, challenge, and recusal, and prohibit private contact between evaluation committee members and companies to ensure fairness in the evaluation process." He also emphasized, "We will closely examine the entire spectrum of corporate efforts toward accounting transparency, from the auditor appointment process to the substantive accounting oversight activities of the audit committee, to ensure that both quantitative and qualitative evaluations are balanced and effective."

This system is designed to allow companies with excellent accounting and audit governance to defer the periodic designation of external auditors by financial authorities for three years (one cycle). The Financial Services Commission and the Financial Supervisory Service plan to hold an additional corporate briefing session in late May, if necessary, ahead of the start of application submissions in June.