Last year, both the number of companies subject to external audit and the number of companies designated for auditors increased. However, the number and proportion of designated companies among listed corporations declined for the third consecutive year.
On May 22, the Financial Supervisory Service announced these findings through its report titled "Status of Companies Subject to External Audit and Auditor Designation in 2024."
As of the end of 2024, the number of companies subject to external audit stood at 42,118, an increase of 2.2% (906 companies) compared to the previous year. Except for 2020, the number has risen annually due to improvements in external audit standards following the implementation of the new External Audit Act. However, last year's growth rate was lower than the average increase of the past ten years (6.4%).
By company type, unlisted joint-stock companies accounted for approximately 92%, totaling 38,774 companies. Listed corporations numbered 2,705 (6.4%), and limited liability companies totaled 634 (1.5%). By asset size, companies with assets between 20 billion and 50 billion KRW accounted for 14,260 (33.8%), while those with assets between 10 billion and 20 billion KRW numbered 12,539 (30.0%).
Among all companies subject to external audit, 30,159 companies, or 71.6%, retained their auditors from the previous year. Meanwhile, 7,152 companies (17.0%) changed their auditors. Due to the periodic designation system, the proportion of listed corporations that changed auditors was 37%, more than double that of unlisted companies.
Additionally, as of the end of last year, the number of companies with designated auditors was 1,859, up 11.5% (192 companies) from the previous year. While the number of periodically designated companies decreased by 41, the number of companies designated by authority increased by 233, resulting in the overall rise.
The proportion of designated companies among all companies subject to external audit rose slightly to 4.4%, up 0.4 percentage points from the previous year's 4.0%. The number of designated listed companies was 970, with a designation rate of 35.9%. The Financial Supervisory Service stated, "Since the implementation of the new External Audit Act, the number increased every year until 2021, but due to improvements in the designation system, it has declined for three consecutive years since 2022."
As of the end of 2024, the number of periodically designated companies was 530, a decrease of 7.2% (41 companies) from a year earlier. Of these, 341 were designated consecutively (317 listed, 24 unlisted), and 189 were newly designated (183 listed, 6 unlisted).
During the same period, the number of companies designated by authority was 1,329, a 21.3% increase from the previous year. By reason, companies preparing for listing accounted for the largest share at 488, followed by those without an appointed auditor (298), those failing to meet financial criteria (184), and those under management review (155).
Additionally, among the 1,859 companies subject to auditor designation, 51 accounting firms were assigned. Group A, which includes the four major accounting firms (Samil, Samjeong, Anjin, Hanyoung), was assigned to 1,018 companies, accounting for 54.8%. The Financial Supervisory Service explained, "We will continue to support new companies subject to external audit in understanding the external audit system through explanatory sessions, and will maintain ongoing communication with stakeholders by listening to the concerns of companies and auditors through meetings."
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