Financial Services Commission Fines Raon Holdings 99.9 Million Won for Accounting Violations

On June 25, the Financial Services Commission announced that at its 12th meeting, it had decided to impose a fine of 99.9 million won on Raon Holdings Co., Ltd. for preparing and disclosing financial statements in violation of accounting standards.

Raon Holdings, a real estate development company, was found to have overstated or understated sales revenue and sales costs by including interest from construction-related borrowings and building demolition costs in the calculation of construction progress for the years 2021 to 2023.

Accordingly, under the Act on External Audit of Stock Companies, the Financial Services Commission decided to impose a fine of 99.9 million won on the company, 19.8 million won on two individuals including the CEO, and 5 million won on Shinbo Certified Public Accountant Audit Team for neglecting audit procedures during the external audit process.

Previously, in May, the Securities and Futures Commission had decided on measures including designating an auditor for two years, recommending the dismissal of the responsible executive, and suspending duties for six months.

In addition, the Financial Services Commission decided to impose a fine of 6.6 million won on Songlim Certified Public Accountant Audit Team after confirming through an auditor review that they had violated important audit procedures. Songlim Certified Public Accountant Audit Team was found to have violated key procedures by omitting risk assessment procedures and control tests for sales and accounts receivable during the audit of a stock company's financial statements.