1,971 Companies Had Designated Auditors Last Year...Up for Third Consecutive Year

Status of Companies Subject to External Audit and Auditor Designation
More Ex Officio Designations, Fewer Periodic Designations

The number of companies with designated auditors among those subject to external audits has been increasing for three consecutive years. While periodic designations, which are mandatory for listed companies and others, have decreased, ex officio designations based on reasons such as deteriorating financial conditions and enforcement actions have increased.

According to the Financial Supervisory Service’s “Status of Companies Subject to External Audit and Auditor Designation for 2025” released on the 26th, the number of companies with designated auditors last year was 1,971, marking an upward trend for the third consecutive year following 1,667 in 2023 and 1,859 in 2024. Through the external auditor designation system, the Financial Supervisory Service directly designates external auditors for companies that require fair audits.

This increase was driven by a rise in ex officio designations. The number of ex officio designated companies last year was 1,446, up by more than 100 from 1,329 in the previous year. This contrasts with periodic designations, which decreased from 530 to 525 over the same period. By reason for ex officio designation, companies scheduled for listing accounted for the largest share at 475, followed by failure to appoint an auditor (381), financial criteria (196), and designation as issues to be managed (156).

Among last year’s ex officio designated companies, the number of unlisted companies was more than twice that of listed companies. Unlisted companies accounted for 67.7% (979), while listed companies made up only 32.3% (467). In contrast, among periodically designated companies, listed companies (94.1%, or 494) far outnumbered unlisted companies (5.9%, or 31).

A total of 51 accounting firms were designated to audit the 1,971 companies with designated auditors. Group A, which includes the four major accounting firms Samil, Samjong, Anjin, and Hanyoung, accounted for more than half of the total (53.0%, or 1,045 companies).

The total number of companies subject to external audit last year was 48,291, an increase of 1.8% (773 companies) from the previous year. The number of companies subject to external audit has continued to rise, except in 2020, as the criteria for external audit eligibility have changed. In the past, companies were subject to external audit if they had assets of at least 12 billion won, or assets of at least 7 billion won and liabilities of at least 7 billion won. Currently, companies are subject to external audit if they meet at least two of the following conditions: assets of at least 12 billion won, liabilities of at least 7 billion won, sales of at least 10 billion won, and at least 100 employees.

Unlisted companies accounted for the vast majority of those subject to external audit, with 39,467 companies (92.0%). Listed companies numbered 2,752 (6.4%), and limited companies numbered 672 (1.6%). By asset size, companies with assets between 20 billion and 50 billion won accounted for 14,581 (34.0%), and those with assets between 10 billion and 20 billion won accounted for 12,661 (29.5%), together making up more than half.

Among all companies subject to external audit, 78.3% (33,580 companies) retained their existing auditors, while 10.6% (4,564 companies) appointed new auditors. The remaining 11.1% (4,747 companies) did not receive an external audit in the previous fiscal year.

An official from the Financial Supervisory Service said, “We will continue to provide guidance so that companies subject to external audit can easily understand the external audit system and do not violate key compliance obligations such as auditor appointment procedures, and we will strengthen communication with auditors and others to listen to difficulties on the ground.”