FSC Chairman Lee Eok-won Vows Strict Review for Companies with Rapidly Decreasing Audit Hours

Financial Services Commission (FSC) Chairman Lee Eok-won has announced that authorities will step up reviews and oversight for companies raising concerns over substandard audits, such as those experiencing sharp drops in audit hours.

Chairman Lee shared key updates on accounting policy implementation during a meeting with the accounting industry today (the 30th).

Recently, concerns have been raised within the accounting sector regarding declining audit quality and weakened accounting transparency, driven by a reduction in audit hours resulting from falling audit fees.

Experts pointed to intensified competition for engagements and growing demands for lower audit fees due to the adoption of artificial intelligence (AI) as the main causes.

The FSC plans to initiate financial statement reviews within this year for companies at high risk of poor audits—such as those showing significant reductions in audit hours compared to the previous year—and to further expand the scale of reviews next year to strengthen management and supervision.

Speaking at the "Accounting Day" commemorative ceremony earlier in the day, Chairman Lee urged, "Please recognize resources invested in accounting as an investment rather than a cost, and support the establishment of internal controls and audit activities." He added, "While actively utilizing innovative digital audit techniques such as AI, ensure that sufficient time and personnel are allocated to prevent any decline in audit quality."

The FSC is currently reviewing the appropriate minimum number of Certified Public Accountants (CPAs) to be selected next year, taking into account personnel demand, the impact of AI technology, and predictability for CPA exam candidates.

The final scale will be determined at the end of November by the CPA Qualification and Disciplinary Committee.

The issue of "unassigned accountants" who fail to find training positions also remains a challenge.

While the FSC drew up and has been implementing the "CPA Practical Training Stabilization Plan" in May, critics point out that limitations still persist.

Choi Un-yeol, Chairman of the Korean Institute of Certified Public Accountants, requested, "Please carefully review the number of successful candidates by taking into account the minimal additional personnel demand resulting from accounting reforms following the Act on External Audit of Stock Companies, as well as the job-substitution effects of AI."

The FSC plans to enact a Basic Accounting Act to enhance accounting transparency even in the non-profit sector and establish a fair accounting supervision and sanction system.

Meanwhile, a total of 145 individuals received awards and commendations this year, including one Order of Industrial Service Merit (Bronze Tower) awarded to Lee Jin-bok, former president of the Daegu Regional Certified Public Accountants Association; one National Order of Service Merit (Hongjo Geunjeong Medal) awarded to Seoul National University Professor Baek Bok-hyun; three Presidential Commendations awarded to individuals including Shinhan Bank Accounting Department Head Lee Eung-chae; and five Prime Ministerial Commendations awarded to individuals including Youth Certified Public Accountants Association President Hwang Byung-chan.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.