FSS warns accounting firms to prioritize audit quality… Investors urged to take note
The Financial Supervisory Service summoned accounting firms in 6 month on 14 day and warned them to stop cutting audit hours and dumping audit fees. The FSS said it would launch inspections if audit hours or fees were reduced abnormally.
The Financial Supervisory Service summoned accounting firms in 6 month on 14 day and warned them to prioritize audit quality. From an investor’s perspective, the reliability of an audit is connected to the reliability of a company’s financial information.
The FSS pointed to accounting firms’ practices of reducing audit hours or excessively lowering audit fees during the competition to win engagements as a problem. The FSS said it would launch inspections if audit hours or fees declined abnormally.
The accounting firms attended after receiving the FSS warning to provide relevant explanations. The FSS conveyed that it would review measures to ensure quality.
Reports also emerged warning of the volatility of single-stock leveraged products. One example cited a particular stock moving in a single day from -20% to +30% the following day.
The Korea Enterprises Federation visited the headquarters of an index management firm in New York and assessed that the Korean stock market meets the qualifications of an advanced market. The delegation reportedly discussed the institutional framework of the Korean market and the standard of corporate disclosures.
The Financial Supervisory Service’s warning and the reports on leverage volatility are separate matters. The Financial Supervisory Service announced that it would periodically monitor changes in audit hours and audit fees going forward.