FSS warns accounting firms over competition to cut audit hours and win engagements
The Financial Supervisory Service warned accounting firms on 6 month 14 day that reducing audit hours and undercutting audit fees would not be acceptable. The FSS said it would launch inspections if abnormal audit practices were identified, which is expected to affect confidence in listed companies’ disclosures and the audit season.
The Financial Supervisory Service called accounting firms in on 6 month 14 day and warned them about shortening audit hours and excessive competition to win engagements. The reason this matters from an investor perspective is that it is directly linked to audit procedures and confidence in disclosures.
The FSS said it would launch inspections if cases were identified in which audit hours were arbitrarily reduced or audit fees were abnormally lowered. As criteria for launching inspections, the FSS cited abnormal changes in audit hours and engagement conditions.
At a meeting to issue recommendations to audit firms, the FSS demanded that they prioritize audit quality over competition to win engagements. The FSS emphasized faithfully carrying out the audit process.
According to multiple reports, the Financial Supervisory Service is conducting on-site inspections alongside meetings with audit partners and working-level staff. The FSS announced follow-up measures depending on the inspection results.
In the health sector, Minister Jeong Eun-kyeong said that public discussions would begin on applying national health insurance coverage to hair loss treatment. She announced procedures to review the relevant regulations and coverage scope.
The Ministry of SMEs and Startups announced that it would support small manufacturers in transitioning to smart manufacturing. The ministry explained that its digital transformation support would help small manufacturers achieve sustainable growth.
In the financial sector, Lee Chan-jin said that he had reviewed financial companies’ surprise simulated hacking exercises. Lee Chan-jin defined simulated hacking as a key management risk and confirmed their response readiness.