Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Korean Institute of Certified Public Accountants

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Korea


    2. Name of member body:
      Korean Institute of Certified Public Accountants

      Or please specify name:



    3. Individual responsible for preparation:
      Ki-Ryong Bae, International Director


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      10 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      Confederation of Asian and Pacific Accountants (CAPA)



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: The Act on External Audit of Stock Companies (hereinafter referred to as âExternal Audit Act?
      b). the Enacting body: The Ministry of Finance and Economy (hereinafter referred to as âMOFE?
      c). date the Act or Code came into force: 12 / 1980


    25. How can IFAC obtain a copy of the Act or Code?
      IFAC can obtain the copy from the Ministry of Government Legislation (hereinafter referred to âMGL? or contact KICPA.


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities A company with assets totaling seven billion Korean Won or more must prepare the financial statements in accordance with the accounting standards and disclose the matters of its internal control system pursuant to the External Audit Act
      Private companies A company with assets totaling seven billion Korean Won or more must prepare the financial statements in accordance with the accounting standards and disclose the matters of its internal control system pursuant to the External Audit Act
      Governmental
      Not-for-profit
      Other (please describe)
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities all companies listed on Korean Stock Exchange (KSE) and Korean Securities Dealers Automated Quotation (KOSDAQ) must have the financial statements externally audited by qualified auditors. Auditors are required to comply with the auditing standards issued by the KICPA and shall not conduct an audit on the companies with which the auditor has relationship limited under the Certified Public Accountants Act (hereinafter referred to as âCPA Act?. If an auditor finds in the course of an audit any wrongdoing or violation of the law, regulation or the article of incorporation by a director of his client, the auditor shall notify it to the statutory internal auditor or the audit committee and report it to the shareholders' meeting. If an auditor finds that the company is in violation of the accounting standards, the auditor shall notify it to the statutory internal auditor or the audit committee.
      Private companies Non-listed company with assets totaling seven billion Korean Won or more must have the financial statements externally audited by qualified auditors. Auditors are required to comply with the auditing standards issued by the KICPA and shall not conduct an audit on the companies with which the auditor has relationship limited under the Certified Public Accountants Act (hereinafter referred to as âCPA Act?. Refer above about auditor wrongdoings.
      Governmental
      Not-for-profit
      Other (please describe)
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 3 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:
      With respect to Q30, it is one year for private companies and three years for listed companies.

      An auditor in the form of an accounting firm shall not have the same partner conduct an audit on the same company for the period of six or more consecutive fiscal years [four or more consecutive fiscal years in case of a stock-listed company]. In case an auditor in the form of an accounting firm has had its CPAs perform an audit of a stock-listed company as its assistants for three consecutive fiscal years, such auditor shall replace not less than two thirds of such assistants in the next fiscal year.

      It shall be unlawful for an audit firm to provide audit service to a public company for more than 6 consecutive fiscal years. However, exceptions are applicable to a foreign -invested public company whose financial statements is needed for consolidation accounting by the foreign investors and where the assignment of same audit firm is required or a public company whose shares are listed on the NYSE, NASDAQ or LSI.



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The External Audit Act (Article 5, 7, 8 and 13)
      The Securities and Exchange Act (Article 186-2 and 186-3)

    2. the Enacting body(ies)

      MOFE (Ministry of Finance and Economy)

    3. the latest amendment date?

      The External Audit Act: January 29, 2004;
      The Securities and Exchange Act: December 18, 2003


    35. How can IFAC obtain a copy of the Legal authority?
      IFAC can obtain the copy from MGL (http://www.moleg.go.kr) or KICPA


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      Listed entities should submit semiannual and quarterly financial statements.


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 3 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      See response to Q33



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity The External Audit Act 09/2003 Audit Standards Committee (“ASC? of the KICPA
      Other (please describe) Private Companies The External Audit Act 09/2003 Audit Standards Committee (“ASC? of the KICPA
      Other (please describe) Listed entity The Securities and Exchange Act 12/2003 The Securities and Futures Commission (SFC)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      IFAC can obtain those copies from the homepages of MOFE and MGL, or via KICPA

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Audit Standards Committee (“ASC? of the KICPA)


    44. For Audit Standards Committee (“ASC? of the KICPA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Professional accountancy organization.

      The External Audit Act gives the KICPA the right to set auditing standards subject to approval by the Financial Supervisory Commission (FSC). The Korean Audit Standards are based on the ISAs.


      b. Name of standards

      The Audit Standards
      The Working Rules of Audit Standards
      The Guidelines for Audit Standards (guidance for matters that are unique to Korea or where the ISA does not provide guidance).


    45. How many voting members does the standard-setting body have?
      11


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: One member is employed by the KICPA and other ten members are voluntary.


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best persons with audit experience and academic among private and public members are appointed.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The President of KICPA, via approval by the Board of Directors.


    49. What is the term of appointment for members?
      2 Year(s)


    50. For how many years has the standard-setting body been in existence?
      43 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      134,453

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      1.190



    52. To what entity is the standard-setting body accountable?
      The Financial Supervisory Commission (FSC)


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Preparation of Initial Draft

      The ASC shall prepare an initial draft including background information, related regulations, arguments for and against each alternative, and comments of the Audit Standards Practice Committee (ASPC) which is a sub-committee of ASC.

      Preparation of Exposure Draft
      ASC shall prepare an exposure draft based on the deliberation of an initial draft. The exposure draft shall be prepared using a sing1e alternative, but the minority opinion may be also included, if necessary.

      Preparation of Final Draft
      The ASC shall review comments on the exposure draft submitted during the notice period and then prepare the final draft through the deliberation of the ASPC.


    2. accessibility of meetings (i.e., public or private)

      Public Hearing Procedures
      (1) When the exposure draft is prepared, the ASC shall conduct an inquiry about the draft, making an advance notice of it to the interested parties including MOFE, FSC and etc.
      (2) The advance notice shall be made by use of e-mail, publications, etc., and the notice period shall be, in principle, thirty (30) days. However, when necessary, the period may be adjusted by the ASC.
      (3) Interested parties may submit their comments on the exposure draft by the end of the notice period.
      (4) The ASC may ho1d a public hearing during the notice period in order to hear comments of the interested parties and experts on the exposure draft. In this case, the ASC should announce, in advance, the date, place and other details of the hearing.


    3. approval process for final standards (i.e., majority required to approve final standards)

      Approval Process
      A majority approval of the ASC is required to formulate or amend the Audit Standard, which shall be deliberated by the Board of Directors of KICPA. Soon after the completion of these procedures, the President of KICPA shall request for an approval of the FSC and declare the new Standards with reflection of FSC position.


    4. other relevant due process activities

      Recently, the External Audit Act requires new auditing standards to cover matters relating to audit independence and credibility of financial statements. Under these circumstances, it is required to communicate with the FSC more than before in the process setting audit standard.


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      30 Day(s)


    Section 5B -- Standard-Setting (The Securities and Futures Commission (SFC))


    44. For The Securities and Futures Commission (SFC), please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      An agency appointed by government

      b. Name of standards

      The Working Rules for review of quarterly and semiannual financial statements


    45. How many voting members does the standard-setting body have?
      5 members


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The members are selected by the various criteria, including independence, professional knowledge skill, and academic and business history.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The President(government) appoints SFC members with recommendation from the Chairman of Financial Supervisory Commission.


    49. What is the term of appointment for members?
      3 Year(s)


    50. For how many years has the standard-setting body been in existence?
      27 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    52. To what entity is the standard-setting body accountable?
      MOFE


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice The CPA Act. 12/2003 Task Force Committee of KICPA
      Professional Accountants in Business The CPA Act. 12/2003 Task Force Committee of KICPA
      Professional Accountants in the Public Sector The CPA Act. 12/2003 Task Force Committee of KICPA
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      IFAC can obtain by download from the KICPA homepage(www.kicpa.or.kr) or contact the KICPA(Global@kicpa.or.kr)

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Task Force Committee of KICPA)


    56. For Task Force Committee of KICPA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Professional accountancy body

      b. Name of standards

      The Code of Ethics for CPAs (based on IFAC's Code of Ethics)


    57. How many voting members does the standard-setting body have?
      The number of committee members is not fixed. Generally 7-8 members are appointed for the committee.


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      KICPA convenes a task force committee to revise the Code of Ethics.

      The Task Force Committee consists of voluntary members: delegates from accounting firms, chairmen of various Research Committees in the KICPA and external directors of the KICPA.
      Diversification and related technical knowledge are generally considered in selecting members of the Task Force Committee. The Task Force should be composed to focus on reflecting opinions from the whole accountancy profession.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      KICPA


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      42,016

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      1.190



    64. To what entity is the standard-setting body accountable?
      Minister of Finance and Economy oversees the KICPA


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      First, KICPA convenes a Task Force Committee for rules-revision; second, the Task Force Committee makes an exposal draft; third, the exposal draft distributes to all members of KICPA to collect opinions; fourth, the Assembly of Delegates (a decision making body of KICPA) approves the final revised standards by ballot.

    2. accessibility of meetings (i.e., public or private)

      The Task Force Committee is not generally open to the public. If necessary, related persons may attend the meeting.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The simple majority of the Assembly of Delegates is required to approve the final standards.

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      15 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      The education system in the Republic of Korea consists of six-year elementary schools, three-year middle schools, three-year high schools, and four-year colleges and universities, which also offer graduate courses leading to Ph.D. degrees. There are also two to three-year junior colleges and vocational colleges as well. Since 1953, the government has introduced the notion of compulsory education, allowing all people to complete six-year primary education for free.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      The Certified Public Accountant Act:
      An individual to operate as an accountant or an auditor should pass the national CPA examinations that the MOFE is in charge of and CPA Examination Committee takes administrative roles. A person who passes the CPA Exams has to complete one-year practical experience and 100hours basic training courses for one year prior to his CPA registration.
      Meanwhile, the CPA has to complete additional one or two year accounting and audit-related practical experiences and 100hours audit-oriented training courses to operate as an external auditor.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      According to the revised the CPA Act, candidates applying for the CPA Exam should complete 12 semester units of Accounting and Tax-related subject, 9 semester units of Business Administration and 3 semester units of Economics in recognized colleges and universities.
      Professional examinations
      The MOFE is in charge of the CPA examination and CPA Examination Committee takes administrative roles pursuant to the CPA Act. The subjects of the CPA examination shall be Accounting, Business Administration, Basic economics, Commercial law, Basic tax law and English in the first exam, and shall be Financial accounting, Cost accounting, Auditing, Tax Accounting and Financial Management in the second one, respectively.

      While the first exam is composed of multiple-choice questions, the second one is the written tests. No applicant may apply for the second examination unless he passes the first one. Successful candidates of the second exam are qualified as junior CPAs. A person who has passed the first round exam shall be exempted therefrom only once for the following first one.
      Practical experience
      A person who has passed CPA Exams has to complete one year practical experience and 100 hours basic training courses to register as Certified Public Accountant. Additionally, the CPA as an external auditor has to complete one or two year practical experiences and 100 hours audit-oriented training courses.
      Final qualifying examination
      Final qualifying procedures are consisted of the examination to complete courses in KICPA Training Center and the Mentor’s evaluation report regarding practical experience obtained in the training institutions.
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Pursuant to the CPA act, MOFE establish the CPA Qualification System Deliberation Committee to deliberate on the matters relating to qualification of CPAs.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      The Committee deliberates on the matters such as the examination subject, planned numbers of successful candidates, other significant matter pertaining to the CPA qualification.

    2. How many voting members does the relevant body(ies) have

      Seven voting members

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      4 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      IFAC can obtain by download from the KICPA homepage (www.kicpa.or.kr) or contact the KICPA (Global@kicpa.or.kr)

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain) MOFE is in charge of CPA exams and the CPA Examina


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      MOFE sets the licensing (registration) requirements in the CPA Act. Also, these requirements are supplemented by the education-related bylaws of KICPA.

      Individuals must be a member of (certified by)the KICPA to perform statutory audits


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify): According to the CPA Act, CPAs shall renew his/her registration to the MOFE every 5 years.


    80. What entity grants the license?
      MOFE


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      Not applicable



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Governmental Accounting Act(*) Pending in MOL Government Accounting Standard Committee within MOFE
      Ministry/department Governmental Accounting Act(*) Pending in MOL Government Accounting Standard Committee within MOFE
      Statutory authority/agency Governmental Accounting Act(*) Pending in MOL Government Accounting Standard Committee within MOFE
      Profit entity owned by government Company Law KASB
      State governments Local Governmental Accounting Act(*) under planing stage Local Government Accounting Standard Committee within Ministry of Government Administration and Home Affairs.
      Local governments Local Governmental Accounting Act(*) under planing stage Local Government Accounting Standard Committee within Ministry of Government Administration and Home Affairs.
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      (*) Note: Korean Government is under due process to formulate new ?Local) Governmental Accounting Act?which reflect the accrual accounting and double entries system while cash basis accounting and single entry system are in effective at present.
      Drafts of the Governmental Accounting Act could be obtained through the MOFE.


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Government Accounting Standard Committee within MOFE)


    83. For Government Accounting Standard Committee within MOFE, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Government Accounting Standard Committee(GASC) - agency appointed by government.

      b. Name of standards

      Governmental Accounting Standards(as planned)


    84. How many voting members does the standard-setting body have?
      10


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      All of the above members are voluntary and have their own profession. The committees are virtual organizations and exist only as form of meeting.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    88. What is the term of appointment for members?
      2 Year(s)


    89. For how many years has the standard-setting body been in existence?
      4 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Not applicable

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      Not applicable



    91. To what entity is the standard-setting body accountable?
      The body is accountable to MOFE


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure draft is not published yet

    2. accessibility of meetings (i.e., public or private)

      It is accessible through private contact with officials of MOFE

    3. approval process for final standards (i.e., majority required to approve final standards)

      When the ED is completed, it will be published for public review. Then MOFE will announce officially.

    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)


    Section 8B -- Standard-Setting (KASB)


    83. For KASB, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      See section 9

      b. Name of standards



    84. How many voting members does the standard-setting body have?


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    91. To what entity is the standard-setting body accountable?


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)


    Section 8B -- Standard-Setting (Local Government Accounting Standard Committee within Ministry of Government Administration and Home Affairs.)


    83. For Local Government Accounting Standard Committee within Ministry of Government Administration and Home Affairs., please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Agency appointed by government.

      b. Name of standards

      Local government accounting standards


    84. How many voting members does the standard-setting body have?
      17


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      All of the above members are voluntary and have their own profession. The committees are virtual organizations and exist only as form of meeting.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Government


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    91. To what entity is the standard-setting body accountable?


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      In progress

    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity The External Audit Act 12/2003 Korea Accounting Standards Board (hereinafter referred as “KASB?
      Other (please describe) The External Audit Act 12/2003 Korea Accounting Standards Board (hereinafter referred as “KASB?
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      IFAC may purchase copies of the Statements of Korea Accounting Standards by making purchase orders to the Korea Accounting Institute (hereinafter referred as “KAI?.

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Korea Accounting Standards Board (hereinafter referred as “KASB?)


    95. For Korea Accounting Standards Board (hereinafter referred as “KASB?, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The FSC has the authority to establish the accounting standards and audit standards. However, the FSC entrusted its tasks to the Korean Accounting Institute and the KICPA, respectively.

      The Korea Accounting Institute (KAI) is an independent private organization and was established in 2000 to set Korean Accounting Standards. The KAI includes the Board of Directors, Korea Accounting Standards Board, the Korea Accounting Standards Advisory Council, Research Department, the General Membership.

      Before 2000, it standards were set by the FSC.


      b. Name of standards

      The Statements of Korea Accounting Standards (hereinafter referred as “SKASs"


    96. How many voting members does the standard-setting body have?
      7


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Two are full-time members employed by the KASB, and five are part–time, voluntary members.


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Highly respected personnel from the academic circle, private corporate sector and public accounting sector


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The General Assembly of KAI appoints the two full-time members, whereas the Board of Directors appoints the other five part-time members. For your information, the General Assembly consists of various delegates from the KICPA, the Financial Supervisory Service, the Korea Stock Exchange and other related accounting/financial organizations.


    100. What is the term of appointment for members?
      3 Year(s)


    101. For how many years has the standard-setting body been in existence?
      5 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      2,000,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      1.190



    103. To what entity is the standard-setting body accountable?
      The Financial Supervisory Commission (FSC)


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      After thorough deliberation and preliminary resolution, the KASB releases exposure drafts on SKASs seeking comments from the public for four to six week.

    2. accessibility of meetings (i.e., public or private)

      Open to the public, provided written request is submitted to and approved by the Chairman of the KASB at least three days before the meeting.

    3. approval process for final standards (i.e., majority required to approve final standards)

      A majority approval is required; that is, at least four out of seven board members must approve of the final draft for official resolution.

    4. other relevant due process activities

      Before the release of exposure drafts, the KASB, in cooperation with the Korea Accounting Institute, co-hosts official forums to invite comments from the accounting profession on major issues.


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      24 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      The Financial Supervisory Commission (FSC)(including its subordinate bodies such as the Securities and Futures Commission (SFC) and the Financial Supervisory Service (FSS)).

      Since 1999, the financial supervisory bodies (the Banking Supervisory Authority, Securities Supervisory Board, Insurance Supervisory Board and Non-bank Supervisory Authority) have been integrated into the Financial Supervisory Commission.


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      The FSC deliberates and resolves policy matters relating to the inspection and supervision of financial institution and the securities and futures market as part of its regulatory responsibilities.
      The SFC is responsible for securities and futures market within the FSC, and the responsibilities of the FSS, as an executive body of the FSC, include the supervision and examination of all financial institutions.

      The External Audit Act provides for accounting and audit regulation. Specially, the Act prescribes the setting of accounting and auditing standards, the responsibility of business for preparing financial statements in compliance with the accounting standards, and the responsibility of auditors to conduct the audits in accordance with the auditing standards. The Act requires auditors to maintain client confidentiality and report fraud to shareholders. The auditor is also liable for any damage for negligence in performing audits or failure to disclose material information.


      The Securities and Exchange Act provides for disclosure of securities issuers to ensure fair and equitable pricing and trading of securities. Listed entities should file annual and semiannual/quarterly reports with FSC/FSS. They are also required to make an interim report on any transaction or event that have material impact on their management or financial condition.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      The FSC/FSS requires auditors to conduct the audits in accordance with the auditing standards and maintain client confidentiality and independence, and report fraud to shareholders. The auditor is also liable for any damage for negligence in performing audits or failure to disclose material information.

    2. accounting and auditing standard-setting

      The FSC has the authority to establish the accounting standards and audit standards. However, the FSC entrusted its tasks to the Korean Accounting Institute and the KICPA, respectively. The FSC may request the necessary revisions to Accounting Standards and retains the right to authorize the audit standards set by KICPA.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      The FSC requires listed entities to submit an annual business report attaching the auditorÂ’s report and a semi-annual business report (including quarterly report in case of the company with assets totaling one trillion) Korean Won attaching the independent accountantÂ’s review report as well as the CEO/CFOÂ’s certification on them.

      The FSC operates the Electronic Disclosure System for the disclosures submitted by listed entities and performs the periodical review on sample basis or the special review on demand pertaining to the appropriateness of audit report.

      In these cases, the FSC may order a listed entity, or related persons to submit reports or other relevant materials for reference, or may have the FSS examine the account books, documents and other items thus submitted, in case of violation of the accounting and disclosure requirements.




    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Korea Stock Exchange (KSE)
      Korean Securities Dealers Automated Quotation (KOS



    Section 10B -- Stock Exchange
    Korea Stock Exchange (KSE) Details


    110. For Korea Stock Exchange (KSE), is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      The Exchanges as self-regulatory organizations maintain a fair market, regulate and supervise the member firms, set listing requirements and regulate corporate disclosures. A listed corporation prepares in document or electronic form, the matters subject to declaration pursuant to the Disclosure Regulation, and submits them to the Exchange, declares the prescribed important corporate information items on the day of their occurrence or within one day of their occurrence. These disclosure items include the changes in accounting principle or estimation and the auditorÂâs opinions such as adverse and disclaimer of opinion or qualified opinion due to the limit placed on the scope of audit. A listed corporation submits to the Exchange its annual/semi-annual/quarterly business reports, etc. in the number of copies specified in the related rules within the prescribed period.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      In case of unfaithful disclosure such as non-compliance, reversals or modifications of disclosure, the Exchange designate the listed corporation as a unfaithfully disclosed corporation or may suspend the trading of stocks, etc. issued by the listed corporation.

    3. How enforcement actions are administered.

      In case of the failure in filing business reports, the disclosure of adverse or disclaimer opinions in audit reports and the noncompliance of disclosure requirements, the Exchanges designate the stocks of such corporation as an administrative issue and finally de-list them from the markets.


    Section 10B -- Stock Exchange
    Korean Securities Dealers Automated Quotation (KOS Details


    110. For Korean Securities Dealers Automated Quotation (KOS, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      See response to Korean Stock Exchange above.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      See response to Korean Stock Exchange above.

    3. How enforcement actions are administered.

      See response to Korean Stock Exchange above.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      There are plans to develop an oversight board to enforce ethical and competency standards for accounting firms and certified public accountants. This is under discussion.


      Currently MOFE has the major oversight responsibilities over the accounting profession pursuant to the CPA act. It includes the scope of services to be provided by CPAs, mechanisms of the national CPA examination, requisitions of the CPA qualification, establishment of accounting firms, duties and responsibilities of CPAs, roles and organization of KICPA, and the disciplinary and criminal sanction against CPAs and accounting firms.

      FSC/FSS has the duties to oversee the auditor for auditing requirements such as audit standards, independence rule, client confidentiality, report fraud to shareholders, retention of documentation and submission of audit report, etc.

      Pursuant to these duties, Accounting Supervision Departments of the FSS monitors both auditing activities of accounting firms and audit teams, and reviews the appropriateness of audit opinions on financial statements of listed companies

      Meanwhile, Audit Quality Control Supervisory Committee (AQCSC) of KICPA performs audit reviews on unlisted or IPO companies and review on auditorÂ’s audit operation management (Quality Assurance Review) that the SFC entrusted to KICPA.


    2. The number of members on the oversight body

      MOFE: a governmental ministry
      FSC: 9 members
      SFC: 5 members
      FSS: a special corporation with no capital
      AQCSC: 17 fulltime committee members


    3. Its powers

      MOFE:
      - Formulations or amendments of accounting-related laws such as the CPA Act, the External Audit Act, Securities and Exchange Act, etc.
      - Disciplinary and criminal sanctions against CPAs and accounting firms
      - Supervisions of KICPA
      -Approvals of the Constitution or the education bylaws formulated or amended by the KICPA.

      FSC/SFC/FSS/AQCSC:
      - Reviews of audit reports
      - Requests for related material, examinations of the account books, documents
      - Administrative measures against individual CPA, accounting firm and the company.


    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      The FSC conducts the periodical review on a random sampling basis or the special review on a requested basis pertaining to the appropriateness of audit report and approve formulations or amendments of related regulations necessary in performing the surveillance delegated to KICPA.

    5. The sanctions the oversight body may impose in the event of non-compliance

      MOFE:
      - Registration cancellation of the Accounting Firm or CPA
      - Suspension of partial or entire operations of the accounting firm
      - Suspension of qualification against CPA

      FSC/FSS/SFC:
      CPA or Accounting Firm
      -Exclusion of the auditor from auditor designation
      -Restriction of audit service for specific companies
      -Additional contributions to the joint fund for indemnity
      -Other necessary measures, such as correction order, request for submission of a memorandum, and warning

      The Company
      -Restriction of issuance of securities up to one year
      -Recommendation of dismissal of officers
      -Auditor designation or request for auditor change up to three years.
      -Other necessary penalties, such as correction order, request for submission of a memorandum, and warning.


    6. How the oversight body is accountable to any public institution or body

      MOFE and FSC are the governmental organizations.


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      FSC/FSS Bank Supervision/Examination Department Accounting Supervision Department Bank and similar financial institution subject to the Bank Act submit a monthly report of business operations to the FSC in accordance with the prescribed form for regulatory reporting. Additionally, listed banks submit business reports to the FSC for general purpose pursuant to security-related acts. But there is little difference between accounting requirements for regulatory reporting and general purpose external financial reporting.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      The banks and similar financial institutions shall comply with the Accounting Standards for Banking Industry determined by the SFC in accounting and drafting financial statements. The FSC analyze the management performance of financial institutions, thereby supervise the soundness of management practice, evaluate the management performance through the examinations of financial institutions, and reflect the results of supervisory and examining functions. There is no separate or additional auditing standard applicable to the banks and similar financial institutions.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      MOFE establishes the major acts related to audit profession, but consults with the FSC in case of formulating or amending act and its subordinate statutes relating financial supervision including audit profession. To be qualified to be an auditor of a bank with assets totaling eight hundred billion Korean Won, the SFC requires the auditor to enter the contract of audit quality control with a foreign accounting corporation.

    2. accounting and auditing standard-setting

      The FSC has the authority to establish the accounting standards and audit standards. However, the FSC entrusted the Accounting Standards for Banking Industry to the Korean Accounting Institute and may requests the revisions to Accounting Standards, if necessary. The FSC retains the right to authorize the audit standards set by KICPA.

    3. review of financial statements prepared by listed entities

      The Bank Examination Department of FSC performs on-site examination and off-site monitoring for compliance with established rules and regulations, including the review of financial statements.

    4. enforcement of accounting, reporting and auditing requirements

      When the Bank Examination Department recognizes a suspicion about a bank's violation of false accounting or improper auditing in the course of examinations, the Audit Supervision Department proceeds to review the appropriateness of audit opinions on financial statements of the bank. In this case, the FSC may order a listed entity, or related persons to submit reports or other relevant materials for reference, or may examine the account books, documents and other items thus submitted, in case of violation of the requirements. The FSC may take any of the relevant administrative actions against the violated person or entity pursuant to related acts.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      FSC/SFC/ FSS - Non-bank Financial Institution Supervision/Examination Department - Accounting Supervision Department


    116. What is the source of Legal authority of the regulatory authority(ies)?
      The Credit Union Act, The Credit-Specialized Financial Business Act, The Mutual Savings Bank Act, The Merchant Banking Corporation Act, other related supervision regulations ,etc.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      MOFE establishes the major acts related to audit profession, but consults with the FSC in case of formulating or amending act and its subordinate statutes relating financial supervision including audit profession.

    2. accounting and auditing standard-setting

      The FSC sets the accounting requirement for the supervision of non-bank financial institutions in the Supervision Regulations. But the Financial Accounting Standards including the Accounting Standard for non-banking Industries and the Statement of Financial Accounting Standards is set by KASB and applicable for general purpose financial reporting. The FSC may request the KAI to revise related accounting standards, if necessary, and retains the right to authorize the audit standards set by the KICPA.

    3. review of financial statements prepared by listed entities

      The Non-Bank Examination Department performs on-site examination and off-site monitoring for compliance with established rules and regulations, including the review of financial statements.

    4. enforcement of accounting, reporting and auditing requirements

      When the Non- Bank Financial Institution Examination Department recognizes a suspicion about a non-bank's violation of false accounting or improper auditing in the course of examinations, the Accounting Supervision Department proceeds to review the appropriateness of audit opinions on financial statements of the non- bank financial Institution. The FSC may order a listed entity, or related persons to submit reports or other relevant materials for reference, or may examine the account books, documents and other items thus submitted, in case of violation of the requirements. The FSC may take any of the relevant administrative actions against the violated person or entity pursuant to related acts.



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      FSC/SFC/ FSS - Insurance Supervision/Examination Department - Accounting Supervision Department


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Insurance Business Act Regulation on Supervision of Insurance Business


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      MOFE is responsible for the Acts related to audit profession, but shall consult with the FSC in case of formulating or amending act and its subordinate statutes relating financial supervision including audit profession.

    2. accounting and auditing standard-setting

      The FSC sets the accounting requirement for the supervision of insurance industry. But the Financial Accounting Standards including the Accounting Standard for Insurance Industry and the Statement of Financial Accounting Standards are applicable for general purpose financial reporting. The FSC may request the KAI to revise related accounting standards, if necessary, and retains the right to authorize the audit standards set by the KICPA.

    3. review of financial statements prepared by listed listed entities

      The Insurance Companies Examination Department of FSC performs on-site examination and off-site monitoring for compliance with established rules and regulations, including the review of financial statements

    4. enforcement of accounting, reporting and auditing requirements

      When the Insurance Examination Department recognizes a suspicion about an insurance company's violation of false accounting or improper auditing in the course of examinations, the audit supervision department of FSC conducts review regarding audit reports. The FSC may order a listed entity, or related persons to submit reports or other relevant materials for reference, or may examine the account books, documents and other items thus submitted, in case of violation of the accounting and disclosure requirements. The FSC may take any of the relevant administrative actions against the violated person or entity pursuant to related acts.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Not applicable.

      The KICPA under the CPA Act is a self-regulatory body responsible for monitoring CPAs. The KICPA is overseen by the MOFE.

      Korea is establishing an accounting oversight board with the power to investigate auditors. The board is scheduled to be established in 2005.


    122. What is the source of Legal authority of each regulatory authority?


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      The Audit Quality Control Supervisory Committee of KICPA performs the quality assurance review program of audit firms every five years.



    125. Under what authority does the organization conduct the program of quality assurance review?
      The Financial Supervisory Service entrusted the task to the Committee pursuant to the Act of External Audits of Stock Companies and accounting firms.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      The CPAs belonging to the Audit Quality Control Supervisory Committee perform the reviews.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      The Securities and Futures Commission
      Relevant Committees of KICPA and the Certified Public Accountant Disciplinary Committee of MOFE. The MOFE has to approve penalties relating to more severe or complex cases.

      MOFE has the formal power to take a disciplinary measure against individual CPAs and accounting firms. KICPA may request the MOFE to impose sanctions.

      MOFE has established the Certified Public Accountant Disciplinary Committee (CPADC) composed of seven members. The committee finally sanctions upon violations of the CPA Act and related rules, significant mistakes or omission in audit and assurance services.

      SFC, composed of five commissioners, suggests sanctions necessary to MOFE and imposes administrative measures on individual CPA and accounting firms in the event of non-compliance with audit standards.


      In the KICPA, there are three committees in relation to investigation and discipline of individual CPAs.

      The Ethics Committee (EC), composed of seven members including the Chair, shall deliberate and decided upon “matters pertaining to disciplinary actions entrusted from the Minister of Finance and Economy”, “matters pertaining to disciplinary actions requested by the Ethics Investigation Deliberative Committee or the Audit Quality Control Review Committee.

      The Ethics Investigation Deliberative Committee (EIDC) is composed of twenty members selected by the Assembly of Delegates. The Committee shall deliberate and decide upon matters pertaining to investigation on the members (practicing CPAs, accounting firm and audit teams)


      The Audit Quality Control Review Committee (AQCRC) is composed of nine members. The committee makes a resolution upon the enactment and amendment of the standards for audit quality control review, approval of quality control review plan, finalization of report on quality control review of auditor practice management and disciplinary measures resulting from the reviews.

      Terms of Members (Q134):
      CPADC of MOFE : N/A
      SFC : 3 years
      EC, EIDC and AQCRC of KICPA : 2 years

      Years in Existence (Q135):
      CPADC : 38 years
      SFC : 7 years
      EC, EIDC: 41 years
      AQCRC :3 years



    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      Refer response to Q29


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Private and public members, its criteria are stipulated in the relevant law or regulation.


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Governments for the CPADC and SFC, and the KICPA P


    134. What is the term of appointment for members?
      Year(s)


    135. For how many years has the body been in existence?
      Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Within the governmental and KICPA budgets

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      MOFE has the formal power to take a disciplinary measure against individual CPAs and accounting firms.


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      20 Day(s)



     

     

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