act on external audit of stock companies...

Act on External Audit of Stock Companies (Republic of Korea)

By Ministry of Legislation

INTRODUCTION

Details of Enactment and AmendmentDetails of Enactment and AmendmentDetails of Enactment and AmendmentDetails of Enactment and Amendment

● Enactment: This Act was enacted on December 31, 1980 as Act No. 3297, in order to protect

the interested parties and to contribute to the sound growth of enterprises, by supplementing any

defects of internal audit systems and by inducing an adequate settlement of accounts, through

obliging a stock company at or exceeding a certain size to undergo an accounting audit by an

external auditor.

● Amendment: This Act has arrived at its present form as the result of being amended seven

times subsequently to its enactment. The latest amendment was on March 28, 2001.

Main ContentsMain ContentsMain ContentsMain Contents

● A stock company whose total values of assets as of the end of immediately preceding business

year are not less than 7 billion won shall be subject to an accounting audit by an external auditor

with respect to the financial statements, consolidated financial statements (referring to the

financial statements to be prepared by the company in controlling or subordinating relationship),

combined financial statements (referring to the financial statements to be prepared by the

large-scale enterprise group).

● Any person eligible to become an external auditor shall be either an accounting corporation

under the Certified Public Accountant Act or an audit team registered with the Korean Institute of

Certified Public Accountants, and the Minister of Finance and Economy may make any restriction,

pursuant to the kind and scale of external auditors, on the scope of companies eligible to make an

audit.

● A stock company subject to an external audit shall select and appoint an external auditor

within four months from the date of commencing each business year. An external auditor shall be

selected and appointed with approval of the statutory auditor or the auditor appointment

committee, and when an external auditor is selected and appointed, such facts shall be reported to

the ordinary shareholders' meeting.

● An external auditor who has prepared an audit report shall submit such a report to the relevant

stock company, the Securities and Futures Commission, and the Korean Institute of Certified

Public Accountants, and the stock company in receipt of an external audit report shall submit the

financial statements which are approved at the ordinary shareholders' meeting to the Securities

and Futures Commission.

● A stock company subject to an external audit shall concurrently keep and publicly announce its

financial statements, consolidated financial statements, combined financial statements, and the

audit report of an external auditor, and the shareholders and creditors of the relevant stock

company may make a perusal of the kept documents at any time during the business hours.

● The Korea Accounting Research Institute which is an independent private corporation shall set

forth the standards for accounting of enterprises in order to ensure the fairness and transparency

of the settlement of accounting of a stock company.

● An external auditor shall, when he has received an unjust solicitation relevant to his duties and

has received, demanded, or promised to receive any money, valuables or benefits, be punished by

imprisonment for not more than 3 years or by a fine not exceeding 30 million won.

Dec. 31, 1980 Act No. 3297

Amended by Dec. 31, 1983 Act No. 3690

Apr. 10, 1984 Act No. 3724

Dec. 30, 1989 Act No. 4168

Dec. 31, 1993 Act No. 4680

Dec. 30, 1996 Act No. 5196

Jan. 8, 1998 Act No. 5497

Feb. 24, 1998 Act No. 5522

Jan. 12, 2000 Act No. 6108

Mar. 28, 2001 Act No. 6427

■■■■ Article 1 (Purpose)Article 1 (Purpose)Article 1 (Purpose)Article 1 (Purpose)

The purpose of this Act is to protect the interest of the concerned person and to contribute to the

sound growth of enterprises by conducting an accounting audit of stock companies by an external

auditor who is independent of the companies (hereinafter referred to as "auditor") and thereby

ensuring the appropriateness of the accounting of the companies.

■■■■ Article 1Article 1Article 1Article 1----2 (Definitions)2 (Definitions)2 (Definitions)2 (Definitions)

The terms used in this Act shall be defined as follows:

1. The term "financial statements" means balance sheet, statement of profit and loss, and other

documents prescribed in the Presidential Decree on the Enforcement of this Act (hereinafter

referred to as the "PD");

2. The term "consolidated financial statements" means consolidated balance sheet, consolidated

income statement, and other documents prescribed in the PD which shall be prepared by a

controlling company when two (2) or more companies are in a relationship of controlling company

and controlled companies as prescribed in the PD; and

3. The term "combined financial statements of enterprise group"(hereinafter referred to as

"combined financial statements") means combined balance sheet, combined income statement,

and other documents prescribed in the PD which shall be prepared by the enterprise group

defined in Article 2 (2) of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as

"enterprise group") by combining the financial statements of the affiliated companies.

■■■■ Article 1Article 1Article 1Article 1----3 (Scope and etc. of Enterprise Group to Prepare Combined Financial Statements)3 (Scope and etc. of Enterprise Group to Prepare Combined Financial Statements)3 (Scope and etc. of Enterprise Group to Prepare Combined Financial Statements)3 (Scope and etc. of Enterprise Group to Prepare Combined Financial Statements)

(1) The scope of enterprise group and its affiliated companies (hereinafter referred to as

"affiliated companies") which shall be obligated to prepare the combined financial statements

shall be prescribed in the PD.

(2) The Securities and Futures Commission(hereinafter referred to as the "SFC") under the Act on

the Establishment and etc. of Financial Supervisory Institution shall, among the enterprise group

and its affiliated companies subject to the combined financial statements in paragraph (1), select

the company which shall prepare the combined financial statements according to the PD

(hereinafter referred to as the "company to prepare the combined financial statements") and

notify thereof to the company by the end of May every year.

(3) Deleted

(4) In relation to paragraph (2), the SFC may request the affiliated companies of enterprise group

to submit the necessary material including without limitation financial statements, shareholders'

register, etc.

■■■■ Article 2 (Companies Subject to External Audit)Article 2 (Companies Subject to External Audit)Article 2 (Companies Subject to External Audit)Article 2 (Companies Subject to External Audit)

Any stock company of which amount of total asset as of the end of the preceding fiscal year is

equal to or greater than the amount prescribed in the PD (hereinafter referred to as "company"),

shall prepare the financial statements (including the consolidated financial statements in case of

the companies which shall prepare consolidated financial statements, and the combined financial

statements in case of the companies which shall prepare combined financial statements), and

have them audited by an auditor with respect to the accounting (hereinafter referred to as "audit");

however, that this shall not apply to the stock companies, to which the Framework Act on

Administration of Government-Invested Institutions applies, or to other companies prescribed in

the PD.

■■■■ Article 3 (Auditor)Article 3 (Auditor)Article 3 (Auditor)Article 3 (Auditor)

(1) The auditor qualified to conduct the audit under Article 2 shall be as follows; however, that

whether the auditor among those who fall under any of the following shall be qualified to conduct

the audit on the consolidated or combined financial statements and the financial statements of

stock-listed corporations (referring to stock-listed corporations under the Securities and

Exchange Act; hereafter the same shall apply) shall be prescribed by the PD.

1. An accounting firm (hereinafter referred to as "accounting firm") under Article 23 of the

Certified Public Accountants Act (hereinafter referred to as the "CPA Act")

2. Deleted

3. An audit team (hereinafter referred to as an "audit team") which is registered with the Korean

Institute of Certified Public Accountants established under Article 41 of the CPA Act (hereinafter

referred to as the "KICPA") in accordance with the Ordinance of the Ministry of Finance and

Economy.

(2) The Minister of Finance and Economy (hereinafter referred to as the "MOFE") may, in

consideration of the form of auditor in any subparagraph of paragraph (1) and the number of

Certified Public Accountants at the auditor (hereinafter referred to as the "CPAs"), impose

restrictions on the size of the companies on which the auditor may conduct the audit and other

matters in accordance with the Ordinance of the Ministry of Finance and Economy.

(3) An auditor in the form of an accounting firm shall not conduct an audit on the companies with

which the auditor has relationship falling under any of subparagraphs of Article 33 of the CPA Act.

An auditor in the form of an audit team shall not conduct an audit on the companies with which one

or more of its CPAs have relationship falling under any of subparagraphs of Article 33 of the CPA

Act.

(4) An auditor in the form of an accounting firm shall not have the same director 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 company that is a stock-listed corporation or an

Association-registered corporation (referring to an Association-registered corporation under the

Securities and Exchange Act; hereafter the same shall apply)].

(5) In case an auditor in the form of an accounting firm has had its CPAs (referring to certificated

public accounts belonging to an accounting firm under Article 26 (3) of the CPA Act) perform an

audit of a company that is a stock-listed corporation or Association-registered corporation 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.

(6) In case an auditor that is an audit team has performed an audit of a company that is an

Association-registered corporation for three consecutive fiscal years, such auditor shall replace

not less than two thirds of certified public accountants participating in such audit in the next fiscal

year.

■■■■ Article 3Article 3Article 3Article 3----2 (Submissio2 (Submissio2 (Submissio2 (Submission of Business Report)n of Business Report)n of Business Report)n of Business Report)

(1) An auditor in the form of an accounting firm shall file the business report with the SFC and the

KICPA within three (3) months after the end of each fiscal year.

(2) The trade name, business specifications, and financial matters of the accounting firm, and

other matters as prescribed by the Ordinance of the Ministry of Finance and Economy shall be

entered in the business report referred to in paragraph (1).

■■■■ Article 4 (Appointment of Auditor)Article 4 (Appointment of Auditor)Article 4 (Appointment of Auditor)Article 4 (Appointment of Auditor)

(1) A company shall appoint an auditor within four (4) months from the commencement of each

fiscal year. The auditor who shall conduct an audit on the financial statements, consolidated

financial statements and combined financial statements shall be the same.

(2) In the selection and appointment of an auditor, any company shall get approval thereof from

the statutory auditor or the auditor appointment committee secured with its expertise and

independence (hereinafter referred to as the "auditor appointment committee" and the audit

committee, if established pursuant to the provisions of Article 415-2 of the Commercial Act

(hereinafter referred to as the "CA"), shall be deemed the auditor appointment committee):

provided, That any stock-listed corporation, any Association-registered corporation and any

affiliated company of an enterprise group to which a company that was notified by the SFC of the

need to prepare a combined financial statement during the immediately preceding fiscal year

under Article 1-3 (2) belongs shall obtain approval therefor from the auditor appointment

committee.

(3) Any company shall, when it appoints an auditor under paragraph (2), report his appointment at

an ordinary general meeting of shareholders under Article 365 of the CA (hereinafter referred to

as an "ordinary shareholders' meeting") called first after his appointment.

(4) In the event that any company appoints a new auditor in the face of the case falling under each

of the following subparagraphs, the provisions of paragraphs (1) and (2) and the former part of

Article 4-2 (1) shall not apply thereto: provided, That in case that any company as prescribed in

the proviso of paragraph (2) appoints a new auditor after falling under subparagraph 2, such

company shall obtain approval therefor from the auditor appointment committee:

1. Where the company replaces the current auditor and appoints a person nominated by the SFC

as an auditor under Article 4-3 (1); and

2. Where an already appointed auditor is unable to discharge his duties as an auditor on the

grounds prescribed by the PD, including a dissolution of the company during the fiscal year.

(5) If a company appoints, or replaces with, an auditor according to each subparagraph of

paragraph (4), the appointment shall be made within two (2) months from the occurrence of cause.

(6) Notwithstanding the provisions of paragraph (2), where a company, which is not a stock-listed

corporation, an Association-registered corporation and an affiliated company of an enterprise

group to which a company that has been notified by the SFC of the need to prepare a combined

financial statement under Article 1-3 (2) belongs, intends to reappoint the auditor who served as

an auditor during the immediately preceding fiscal year, it may decide not to obtain the approval

of the statutory auditor or the auditor appointment committee.

(7) Any company shall, when it appoints an auditor under paragraph (2), consult in advance with

the statutory auditor or the auditor appointment committee about his remuneration and the

auditing time.

(8) Necessary matters concerning the composition and operation of the auditor appointment

committee under paragraph (2) shall be prescribed by the PD.

■■■■ Article 4Article 4Article 4Article 4----2 (Appointment, etc. of Auditor by Stock2 (Appointment, etc. of Auditor by Stock2 (Appointment, etc. of Auditor by Stock2 (Appointment, etc. of Auditor by Stock----Listed Corporation and Listed Corporation and Listed Corporation and Listed Corporation and

AssociationAssociationAssociationAssociation----Registered Corporation)Registered Corporation)Registered Corporation)Registered Corporation)

(1) A stock-listed corporation and an Association-registered corporation shall appoint an auditor

for the period of three (3) consecutive fiscal years within four (4) months from the

commencement of the initial fiscal year. In this case, if a company that is a stock-listed

corporation or an Association-registered corporation appoints a new auditor on the grounds as

prescribed in each subparagraph of Article 4 (4), such company shall appoint the auditor for every

three (3) consecutive fiscal years beginning with the business year following the current fiscal

year.

(2) Notwithstanding paragraph (1), if any of the causes in the PD including, but not limited to, the

violation of auditor's duty occurs, a company may dismiss the auditor upon approval from the

auditor appointment committee within three (3) months after the end of each fiscal year even

during the period of three (3) consecutive fiscal years.

(3) A company shall, when it dismisses the auditor under paragraph (2), file without any delay a

report thereon with the SFC.

■■■■ Article 4Article 4Article 4Article 4----3 (Designation, etc. of Auditor by SFC)3 (Designation, etc. of Auditor by SFC)3 (Designation, etc. of Auditor by SFC)3 (Designation, etc. of Auditor by SFC)

(1) The SFC may designate an auditor of a company upon request from the company with approval

from the statutory auditor or the auditor appointment committee, or request the company falling

under any of the following subparagraphs to appoint or replace with the auditor who is designated

by the SFC within the period of three (3) fiscal years. In this case, the auditor to be designated by

the SFC shall be limited to the accounting firm:

1. The company which fails to appoint an auditor within the period in Article 4 (1) and (5) or

Article 4-2 (1);

2. The company which replaces an auditor without proper cause or appoints an auditor in violation

of Article 4 (2) or Article 4-2 (1);

3. The company which, based upon the audit review by the SFC, turns out to have prepared and

publicly notified the financial statements, consolidated financial statements or combined financial

statements in violation of accounting standards in Article 13; however, that the company which is

found to have committed only a minor violation as prescribed by the SFC shall be excluded;

4. The company of which amount of total asset is more than that prescribed in the PD, and of

which major shareholders and the special-related persons as prescribed in the PD own more than

50% of the issued shares of the company (excluding non-voting shares, hereinafter the same

shall apply), and of which representative director is from the major shareholders or the

special-related persons;

5. and 6. Deleted;

7. The stock-listed corporation which is designated as requiring fair audit by the SFC according

to the PD;

8. Deleted;

8-2. The relevant company in case where a bank having a business relation with a company as

determined by the PD, on the grounds prescribed by the PD, requests the SFC to designate an

auditor; and

9. The company which is otherwise deemed to have need for fair audit as prescribed in the PD.

(2) If the SFC requests the appointment or replacement of auditor according to paragraph (1), the

company shall comply with such request unless there is any special reason. If any of the causes

prescribed in the PD occurs, the company or the appointed auditor may request the SFC to

re-designate an auditor.

(3) Notwithstanding paragraph (1), the SFC is not required to request the company, which

appointed an auditor upon approval of the auditor appointment committee pursuant to Article 4 (2)

according to the PD, to replace with or appoint an auditor.

■■■■ Article 4Article 4Article 4Article 4----4 (Report on Appointment, etc. of Aud4 (Report on Appointment, etc. of Aud4 (Report on Appointment, etc. of Aud4 (Report on Appointment, etc. of Auditor)itor)itor)itor)

If a company appointed or replaced with an auditor, the company shall report thereof to the SFC

according to the PD; however, that the report may be omitted in case of the Following

subparagraphs:

1. Where the company appointed the auditor designated by the SFC upon its request;

2. Where the company replaced with or appointed the auditor upon request of the SFC; or

3. Where the company, which is not a stock-listed corporation, an Association-registered

corporation or an affiliated company of an enterprise group to which a company that has been

notified by the SFC of the need to prepare a combined financial statement under Article 1-3 (2)

belongs, reappoints the auditor for the immediately preceding fiscal year.

■■■■ Article 4Article 4Article 4Article 4----5 (Right of Former Audit5 (Right of Former Audit5 (Right of Former Audit5 (Right of Former Auditor to State Opinion)or to State Opinion)or to State Opinion)or to State Opinion)

(1) Any company shall, when it intends to appoint an auditor other than an auditor who peformed

an audit of the company in the immediately preceding fiscal year (hereinafter referred to as a

"former auditor") or to dismiss an auditor under Article 4-2 (2), give the former auditor or the

auditor to be dismissed an opportunity to state his opinion to the statutory auditor or the auditor

appointment committee.

(2) In the event that the auditor to be dismissed under Article 4-2 (2) states his opinion under

paragraph (1), the company shall report details of the opinion stated by him to the SFC.

(3) Necessary matters concerning the method of stating the opinion and procedures for reporting

such stated opinion under paragraphs (1) and (2) shall be prescribed by the PD.

■■■■ Article 5 (Accounting Audit Standards)Article 5 (Accounting Audit Standards)Article 5 (Accounting Audit Standards)Article 5 (Accounting Audit Standards)

(1) An auditor shall conduct an audit in accordance with the accounting audit standards which are

generally accepted as fair and reasonable.

(2) The accounting audit standards in paragraph (1) shall be decided by the KICPA with approval

of the Financial Supervisory Commission.

■■■■ Article 6 (Authority of Auditor)Article 6 (Authority of Auditor)Article 6 (Authority of Auditor)Article 6 (Authority of Auditor)

(1) An auditor may, at any time, review or duplicate the accounting books and records of a

company, the companies which have special relationship with the company as prescribed in the

PD including without limitation holding of the stocks of the company in excess of certain ratio

(hereinafter referred to as "related companies"), and the affiliated companies, or request the

submission of accounting materials, or investigate the business and asset status if specially

necessary for performing its duties.

(2) An auditor who conducts an audit on the consolidated or combined financial statements may, if

necessary for performing its duties, request the auditors of a company, its related companies and

affiliated companies to cooperate, including without limitation the submission of accounting

materials. In this case, the auditors of the company, its related companies and affiliated

companies shall comply with such request without delay.

■■■■ Article 7 (Submission of Financial Statements, etc.)Article 7 (Submission of Financial Statements, etc.)Article 7 (Submission of Financial Statements, etc.)Article 7 (Submission of Financial Statements, etc.)

A company shall prepare the financial statements, consolidated or combined financial statements

of the fiscal year and submit them to the auditor within the period prescribed in the PD.

■■■■ Article 8 (Article 8 (Article 8 (Article 8 (Submission, etc. of Audit Report)Submission, etc. of Audit Report)Submission, etc. of Audit Report)Submission, etc. of Audit Report)

(1) An auditor shall prepare and submit the audit report to a company (including statutory auditor

or audit committee), the SFC, and the KICPA within the period prescribed in the PD. In this case,

a major management index showing the profitability, growth potential and stability of the company

shall be appended to the audit report as prescribed by the FSC.

(2) A company shall submit, pursuant to the PD, to the SFC the financial statements approved by

an ordinary shareholders' meeting pursuant to Article 449 (1) and (3) of AC; however, that in case

the financial statements which have been approved by an ordinary shareholder's meeting are the

same as those attached to the audit report which shall be submitted to the SFC by an auditor

according to paragraph (1), they are not required to be submitted to the SFC.

■■■■ Article 9 (Confidentiality)Article 9 (Confidentiality)Article 9 (Confidentiality)Article 9 (Confidentiality)

An auditor, its CPA, commissioner of the SFC, other assistants in relation to an audit or

supervision, and other relevant person of the KICPA who performs the duties entrusted by the

SFC shall keep confidential any confidential information which was obtained in the course of

performing the duties; however, that this shall not apply if the laws permit to the contrary thereof.

■■■■ Article 10 (Report of Wrongdoings, etc.)Article 10 (Report of Wrongdoings, etc.)Article 10 (Report of Wrongdoings, etc.)Article 10 (Report of Wrongdoings, etc.)

(1) 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, the auditor shall notify it to the statutory auditor or

the audit committee and report it to the shareholders' meeting.

(2) If an auditor finds that the company is in violation of the accounting standards, the auditor shall

notify it to the statutory auditor or the audit committee.

(3) If a statutory auditor or audit committee finds any wrongdoing or violation of the laws,

regulation or the articles of incorporation by a director, they shall notify it to the auditor.

■■■■ Article 11 (Attendance at Shareholders' Meeting)Article 11 (Attendance at Shareholders' Meeting)Article 11 (Attendance at Shareholders' Meeting)Article 11 (Attendance at Shareholders' Meeting)

An auditor or its CPA shall, upon request by a shareholders' meeting, attend the meeting and

render its opinion or answer the questions of shareholders.

■■■■Article 12 Deleted. Article 12 Deleted. Article 12 Deleted. Article 12 Deleted.

■■■■ Article 13 (Accounting Standards)Article 13 (Accounting Standards)Article 13 (Accounting Standards)Article 13 (Accounting Standards)

(1) The accounting standards of a company shall be established by the FSC with the deliberation

of the SFC.

(2) The accounting standards in paragraph (1) shall ensure the uniformity and objectivity of the

accounting of an enterprise and the auditing by an auditor.

(3) A company shall prepare its financial statements, consolidated or combined financial

statements in accordance with the accounting standards in paragraph (1).

(4) The FSC may entrust or delegate the duty in paragraph (1) to a specialized private corporation

or organization in accordance with the PD.

(5) If the FSC deems it necessary for the protection of interested parties, the conformity to the

international accounting standards and etc. the FSC may request to the private corporation or

organization in paragraph (4) (hereinafter referred to as the "accounting standards institution")

the amendment of the accounting standards upon the deliberation of the SFC. In this case, the

accounting standards institution shall comply with the request of the FSC unless there is any

justifiable reason.

(6) The Financial Supervisory Service established by the Act on Establishment, etc. of the

Financial Supervisory Institution (hereinafter referred to as the "FSS") may assist, in accordance

with the PD, the accounting standards institution within the limit of 5% of the amount of charges to

be collected according to Article 206-8 (8) 2 of the SEA.

■■■■ Article 14 (Keeping and Public Notification, etc. Article 14 (Keeping and Public Notification, etc. Article 14 (Keeping and Public Notification, etc. Article 14 (Keeping and Public Notification, etc. of Audit Report)of Audit Report)of Audit Report)of Audit Report)

(1) A company shall keep and publicly notify its financial statements (including consolidated

financial statements for a company which prepares them, and combined financial statements for

an affiliated company) with an audit report prepared by an auditor.

(2) When a company makes public notice of its balance sheet pursuant to Article 449 (3) of CA, the

company shall state the name and opinion of its auditor.

(3) An auditor in the form of accounting firm shall keep and publicly notify the business report,

which is submitted pursuant to Article 3-2 (1), in accordance with the PD.

(4) The SFC and the KICPA shall keep at a certain place the business reports, which shall be

submitted by accounting firm pursuant to Article 3-2 (1), and the audit reports, which shall be

submitted pursuant to Article 8 (1), for two (2) years, and permit the public to review them.

(5) A shareholder and creditor of a company may review at any time during the working hour the

documents to be kept according to paragraph (1) and request the copy or duplicate thereof with

the payment of charge decided by the company.

■■■■ Article 15 (Audit Review, etc. by SFC)Article 15 (Audit Review, etc. by SFC)Article 15 (Audit Review, etc. by SFC)Article 15 (Audit Review, etc. by SFC)

(1) The SFC shall review audit reports, if necessary to ensure fair performance of auditing, and

perform other duties prescribed in the PD.

(2) Deleted

(3) The FSC shall decide the matters necessary for the SFC's performing its duties with

deliberation of the SFC.

(4) The SFC may delegate or entrust part of its authorities or duties under this Act to the chairman

of the SFC and the governor of the FSS (hereinafter referred to as the "Governor of the FSS") in

accordance with the PD.

(5) The SFC may delegate or entrust all or part of its duties in paragraph (1), Article 5 (2), Article

15-2 and Article 16 (1) to the KICPA in accordance with the PD. In this case, the KICPA may

charge a portion of the audit fee as a supervisory service fee in accordance with the Ordinance of

the Ministry of Finance and Economy.

(6) Deleted

■■■■ Article 15Article 15Article 15Article 15----2 (Request, etc. for Submissio2 (Request, etc. for Submissio2 (Request, etc. for Submissio2 (Request, etc. for Submission of Materials)n of Materials)n of Materials)n of Materials)

(1) If the SFC deems it necessary to perform its duties in Article 15 (1), the SFC may request a

company, the related companies, the affiliated companies, and an auditor to submit materials, or

to present opinions or to report, or have the governor of the FSS review the accounting books and

records of the company, the related companies and the affiliated companies or investigate the

business and financial status.

(2) If the SFC deems it necessary to perform its duties in Articles 1-3 and 4-3, the SFC may

request the Fair Trade Commission and the National Tax Administration to submit the materials

prescribed in the PD. In this case, the requested institutions shall comply with such request unless

there is any special reason.

(3) Any person who reviews the accounting books and documents of a company or investigates

the business and financial status according to paragraph (1) shall carry the certified identification

evidencing his authority and show it to the relevant person.

■■■■span>span>span>span>Article 15Article 15Article 15Article 15----3 Deleted. 3 Deleted. 3 Deleted. 3 Deleted.

■■■■ Article 15Article 15Article 15Article 15----4 (Assistance)4 (Assistance)4 (Assistance)4 (Assistance)

The assistance to the FSC and the SFC in performing the duties under this Act shall be provided

by the FSS in accordance with the PD.

■■■■ Article 16 (Measures, etc. on Auditor)Article 16 (Measures, etc. on Auditor)Article 16 (Measures, etc. on Auditor)Article 16 (Measures, etc. on Auditor)

(1) If an auditor or its CPA falls under any of the following subparagraphs, the SFC may propose

the MOFE to revoke the registration of the auditor or its CPA, or to order the suspension of the

authorization for a certain period, or may restrict the conducting of audit on a specific company or

take other necessary measures:

1. Violation of Article 3 (2) and (4), Article 3-2 (1), Article 5 (1), Article 8 (1), Article 9, Article 10

(1) and (2), Article 11, Article 14 (3), or Article 17-2 (1);

2. Refusal or avoidance of submission of materials in Article 15-2 (1);

3. Violation of Article 17 (6); or

4. Other violation of this Act or the orders issued hereunder.

(2) If a company falls under one of the following subparagraphs, the SFC may recommend the

shareholders' meeting of the company (including the affiliated companies in case of the combined

financial statements) to discharge its officers, forbid the issue of securities for a certain period, or

take other necessary measures against the company:

1. Failure to comply with demand of the SFC pursuant to Article 4-3 (1) without any justifiable

reason;

2. Violation of Article 4-4, Article 7, Article 8 (2) or Article 10 (3);

3. Failure to prepare the financial statements, consolidated or combined financial statements, or

preparation and public notification of them in violation of the accounting standards in Article 13;

4. Violation of Article 14 (1) and (2); or

5. Refusal, disturbance or avoidance of demand for submission of materials, review, or

investigation, pursuant to Article 1-3 (4) and Article 15-2 (1) without any justifiable reason or

provision of false material.

■■■■ Article 16Article 16Article 16Article 16----2 (Publication of Violations)2 (Publication of Violations)2 (Publication of Violations)2 (Publication of Violations)

In the event that any company or any auditor falls under any case of the following subparagraphs,

the SFC may publish the fact of violation for a period of not more than three years from the date

on which such fact of violation is made definite as prescribed by the FSC:

1. Where it prepares a financial statement, a consolidated financial statement or a combined

financial statement in violation of the accounting standards under Article 13;

2. Where it fails to enter matters that are required to be entered in an audit report or enters false

matters in the audit report; and

3. Where it violates this Act or finance-related Acts and subordinate statutes.

■■■■ Article 17 (Liabilities to Compensate Damages)Article 17 (Liabilities to Compensate Damages)Article 17 (Liabilities to Compensate Damages)Article 17 (Liabilities to Compensate Damages)

(1) If an auditor causes any damage to a company due to negligence in carrying out its duties, the

auditor shall be liable for the damage against the company. In case of an auditor in the form of an

audit team, the CPAs involved in the audit of the company shall be jointly and severally liable for

the damage.

(2) If an auditor causes any damage to a third party who utilizes the audit report, which omits to

state important matters or makes a false statement, without knowledge thereof, the auditor shall

be liable for the damage against the third party; however, that in case an auditor of the controlled

company, related company, or affiliated company is responsible for a failure to state important

matters or for making a false statement in the audit report of the consolidated or combined

financial statements, such auditor shall be liable for the damage against the third party who

utilizes them without knowledge thereof.

(3) The latter part of paragraph (1) shall apply mutatis mutandis to paragraph (2).

(4) If, in addition to an auditor, a director and/or statutory auditor(in case an audit committee is

established, referring to the member of audit committee, and the same shall apply in this

paragraph) of a company is liable for damages of a company or of a third person, all of the auditor,

director and/or statutory auditor are jointly and severally liable for the damage.

(5) With respect to paragraphs (1) through (3), an auditor or CPA involved in the audit shall not be

liable for the damage if it is proved that the auditor or CPA did not neglect in the performance of

the duties.

(6) In order to secure the liability to compensate damages in paragraphs (1) through (4), an

auditor shall take necessary measures including, but not limited to, the accumulation of joint fund

for damage compensation in Article 17-2 and the purchase of insurance policy pursuant to the

Ordinance of the Ministry of Finance and Economy.

(7) The liability to compensate damages in paragraphs (1) through (4) shall be extinguished if the

claim thereof is not asserted within one (1) year from the date when the claimant has become

aware of the facts or within three (3) years from the date when the audit report has been

submitted; however, that the period may be extended by a contract in case of the appointment of

auditor pursuant to Article 4.

■■■■ Article 17Article 17Article 17Article 17----2 (Accumulation, etc. of Joint Fund for Damage Compensation)2 (Accumulation, etc. of Joint Fund for Damage Compensation)2 (Accumulation, etc. of Joint Fund for Damage Compensation)2 (Accumulation, etc. of Joint Fund for Damage Compensation)

(1) An accounting firm shall accumulate the joint fund for damage compensation (hereinafter

referred to as "the joint fund") at the KICPA to compensate damages to a company or third party

in Article 17 (1) and (2): Provided, that in the event that a liability insurance for compensation

prescribed by the PD is secured, an annual reserve referred to in paragraph (2) from among the

joint fund may be exempted.

(2) The joint fund in paragraph (1) shall be classified into a basic reserve and an annual reserve

for each fiscal year, and the amount and the limit of accumulation shall be prescribed in the PD.

(3) An accounting firm which has accumulated the joint fund pursuant to paragraph (1) shall not

assign, pledge or provide as a security the joint fund at the KICPA unless permitted in the PD. The

joint fund is not allowed for attachment (including provisional attachment).

■■■■ Article 17Article 17Article 17Article 17----3 (Payment of Joint Fund and Limit of Payment)3 (Payment of Joint Fund and Limit of Payment)3 (Payment of Joint Fund and Limit of Payment)3 (Payment of Joint Fund and Limit of Payment)

(1) If a judgment to the effect that an accounting firm is liable for compensation of damages to the

company or third party in Article 17 (1) and (2), becomes final and conclusive, the KICPA shall pay

the joint fund upon request of the company or third party.

(2) The limit of payment by the KICPA pursuant to paragraph (1) shall be prescribed in the PD

according to the applicant and the accounting firm respectively.

(3) If the KICPA makes the payment pursuant to paragraph (1), the accounting firm shall bear the

joint liability within the limit of payment in paragraph (2).

(4) If the KICPA makes the payment pursuant to paragraph (1), the KICPA shall have the right of

indemnity against the accounting firm which caused the payment.

(5) If the balance of the joint fund which is calculated according to the formula determined by

KICPA, falls short of the basic reserve in Article 17-2 (2) due to the payment in paragraph (1), the

KICPA may request the accounting firm to supplement the shortage in accordance with the PD.

■■■■ Article 17Article 17Article 17Article 17----4 (Administration, etc. of Joint Fund)4 (Administration, etc. of Joint Fund)4 (Administration, etc. of Joint Fund)4 (Administration, etc. of Joint Fund)

(1) The KICPA shall administer the joint fund according to the respective accounting firm, and

keep the accounting of the joint fund separately from that of its own assets.

(2) The Ordinance of the Ministry of Finance and Economy shall prescribe the details necessary

for the administration of the joint fund, including, but not limited to, operating method, time and

procedures of payment, and refund thereof.

(3) If the MOFE deems it necessary, the MOFE may investigate the KICPA's administration, etc. of

the joint fund.

■■■■ Article 18 (Exceptions for StockArticle 18 (Exceptions for StockArticle 18 (Exceptions for StockArticle 18 (Exceptions for Stock----Listed Corporations, etc.)Listed Corporations, etc.)Listed Corporations, etc.)Listed Corporations, etc.)

If the provisions of the SEA on the audit by CPA are different from those of this Act, the former

provisions shall apply; however, that this shall not apply with respect to the provisions on the

financial accounting standards of the company.

■■■■ Article 18Article 18Article 18Article 18----2 (Request for Submitting Materials)2 (Request for Submitting Materials)2 (Request for Submitting Materials)2 (Request for Submitting Materials)

The SFC may, if necessary to carry out its work under this Act, request the KICPA or related

institutions to submit materials. In this case, those institutions shall comply with such request

unless special grounds exist that make it impossible for them to do so.

■■■■ Article 19 (Penal Provisions)Article 19 (Penal Provisions)Article 19 (Penal Provisions)Article 19 (Penal Provisions)

(1) If an auditor or its CPA, a statutory auditor, or a member of the auditor appointment committee

(referring to any member of the audit committee if such committee is established) receives,

demands, or promises to receive money or other valuables in response to the request to engage

in improper handling of his duties, an imprisonment for not more than three (3) years or a fine not

exceeding thirty (30) million won shall apply; however, that if in case of fine the amount of five (5)

times the amount of economic benefits in response to the unjust handling of the duties exceeds

thirty (30) million won, the amount of fine shall not exceed the sum equaling five (5) times the

amount of economic benefits.

(2) Paragraph (1) shall apply to any person who promises or provides, or expresses the intention

to provide, money or other valuables or benefits in paragraph (1).

(3) The money or other valuables, or benefits in paragraphs (1) and (2) shall be confiscated. If all

or part of them cannot be confiscated, their equivalent amount shall be collected.

■■■■ Article 20 (Penal Provisions)Article 20 (Penal Provisions)Article 20 (Penal Provisions)Article 20 (Penal Provisions)

(1) If any person who is indicated in Article 635 (1) of CA or who is otherwise in charge of the

accounting of a company, or an auditor or its CPA, or any person who is related to the handling of

audit, commits any act falling under any of the following subparagraphs, an imprisonment for not

more than three (3) years or a fine not exceeding thirty (30) million won shall apply:

1. Failure to appoint an auditor within the period in Article 4 (1) and (5) or Article 4-2 (1) without

justifiable reason;

2. Failure to state the matters to be included in an audit report, or the making of a false statement

in an audit report;

3. Divulgence of confidential information in violation of Article 9;

4. Failure to report wrongdoing, etc. of directors pursuant to Article 10;

5. Making a false statement or concealing the facts at the shareholders' meeting in violation of

Article 11;

6. Deleted

7. Failure to prepare the financial statements, consolidated or combined financial statements; or

8. Preparation and public notification of the false financial statements, consolidated or combined

financial statements in violation of the accounting standards under Article 13.


accounting of a company commits any act falling under any of the following subparagraphs, an

imprisonment for not more than two (2) years or a fine not exceeding twenty (20)million won shall

apply:

1. Deleted

2. Deleted

3. Presentation of a false material to an auditor or its CPA or disturbance of the external audit by

fraud or other improper means;

4. Refusal, disturbance, or avoidance of review, duplication, request for report, or investigation

by an auditor pursuant to Article 6 without justifiable reason, or failure to submit the material;

5. Failure to submit the financial statements, consolidated or combined financial statements in

violation of Article 7 and Article 8 (2); or

6. Refusal, disturbance, or avoidance of request for submission of material, review, or

investigation pursuant to Article 1-3 (4) and Article 15-2 (1) without justifiable reasons, or

submission of false material.


accounting of a company, or an auditor or its CPA commits any act falling under any of the

following subparagraphs, an imprisonment for not more than one (1) year or a fine not exceeding

ten (10) million won shall apply:

1. Failure to comply with request of the SFC in Article 4-3 (1) without justifiable reason;

2. Deleted

3. Deleted

4. Failure to submit the audit report in Article 8 (1);

5. Failure to comply with request to attend the shareholders' meeting pursuant to Article 11;

6. Deleted

7. Failure to state the name of the auditor and the auditor's opinion in violation of Article 14 (2).

■■■■ Article 20Article 20Article 20Article 20----2 (Fine for Negligence)2 (Fine for Negligence)2 (Fine for Negligence)2 (Fine for Negligence)

(1) If a company commits any of the following subparagraphs, a fine for negligence not exceeding

five million won shall apply:

1. Failure to report according to Article 4 (4); and

2. Failure to keep and publicly notify an audit report in violation of Article 14 (1).

(2) The fine for negligence in paragraph (1) shall be imposed and collected by the SFC in

accordance with the PD.

(3) Any person who challenges the imposition of the fine for negligence in paragraph (2) may file

an objection with the person who is authorized to impose the fine within thirty days from the

delivery of the notice thereof.

(4) If any person on whom the fine was imposed according to paragraph (2) files an objection in

paragraph (3), the person who is authorized to impose the fine shall notify it to the competent

court without delay, and thereafter the court shall handle the case in accordance with the

Non-Contentious Case Procedure Act.

(5) If no objection is filed and the fine for negligence is not paid within the period in paragraph (3),

the fine for negligence shall be collected pursuant to the rules of disposition on the national tax in

arrears.

■■■■ Article 21 (Joint Penal Provisions)Article 21 (Joint Penal Provisions)Article 21 (Joint Penal Provisions)Article 21 (Joint Penal Provisions)

If a representative of a company, or an agent or employee of a company or individual commits the

violation of Article 19 or Article 20 with respect to the affairs of the company or individual, the

same amount of fine in Article 19 or Article 20 shall be imposed on the company or individual in

addition to the offender.

■■■■ Article 22 (Enforcement Decree)Article 22 (Enforcement Decree)Article 22 (Enforcement Decree)Article 22 (Enforcement Decree)

The matters necessary for the enforcement of this Act shall be prescribed in the PD.

ADDENDA ADDENDA ADDENDA ADDENDA

(1) (Enforcement Date) This Act shall enter into force on January 1, 1981.

(2) (Applications in Particular Cases) The provisions of Articles 4 and 5 (1) shall begin to apply

from the first initial business year after January 1, 1982: provided, That in case of a company

which has altered its term for the settlement of accounts on and before December 31, 1982 in

accordance with the provision of Article 12, if the period of the business year subject to audit for

the first time falls short of one year, the provisions of Articles 4 and 5 (1) shall begin to apply from

the business year subsequent to such business year except for the company subject to the audit

under the provision of Article 182 of the Securities and Exchange Act.


■■■■ Article 1 (Enforcement Date)Article 1 (Enforcement Date)Article 1 (Enforcement Date)Article 1 (Enforcement Date)

This Act shall enter into force on March 1, 1984.

■■■■Articles 2 through 7 Articles 2 through 7 Articles 2 through 7 Articles 2 through 7 Omitted.



This Act shall enter into force on September 1, 1984.

■■■■Articles 2 through 25 Articles 2 through 25 Articles 2 through 25 Articles 2 through 25 Omitted.

ADDENDAADDENDAADDENDAADDENDA


(2) (Transitional Measures in relation to Restriction on Duties of Auditor) With regard to the cases

of restriction on the duties of an auditor, the previous provision shall continue to apply until March

31, 1990 in spite of the amended provision of Article 3 (2).

(3) (Transitional Measures in relation to Appointment of Auditor) A company which has begun

before the enforcement of this Act the business year to which the enforcement date of this Act

belongs may select and appoint an auditor for such a business year in accordance with the

previous provisions in spite of the amended provision of Article 4.

(4) (Transitional Measures in relation to Application of Standards for Accounting) The previous

standards for accounting shall be applied until the Securities and Exchange Commission

determines the standards for accounting with the approval of the Minister of Finance and

Economy in accordance with the amended provision of Article 5.

(5) (Term of Office of First Commissioners of Supervisory Commission) The term of office of the

first commissioners of the Supervisory Commission shall be two years for three persons, three

years for four persons in spite of the amended provision of Article 15-3 (5).



(2) (Transitional Measures in relation to Consolidated Financial Statements) The amendments to

Articles 2, 14 (1) and 15 (5) shall be applied on and after the first business year after the

enforcement date of this Act.

(3) (Transitional Measures in relation to Commissioners of External Audit Supervisory

Commission) The commissioners of the External Audit Supervisory Commission assigned under

the provision of former Article 15-3 before the enforcement date of this Act shall be regarded as

assigned under this Act. In such case, the term of office begins from the date of commission under

the previous provisions.

(4) (Transitional Measures in relation to Application of Penalties) In case of the application of

penalties to acts committed before the enforcement of this Act, the previous provisions shall

apply thereto.



This Act shall enter into force on January 1, 1997.

■■■■ Article 2 (General Application Examples)Article 2 (General Application Examples)Article 2 (General Application Examples)Article 2 (General Application Examples)

The amendments to the Articles 3, 3-2, 4-3, 10 and 14 (3) and (4) shall be applied from the

business year which initially starts on and after January 1, 1997.

■■■■ Article 3 (Examples of Application on Appointment of Auditor)Article 3 (Examples of Application on Appointment of Auditor)Article 3 (Examples of Application on Appointment of Auditor)Article 3 (Examples of Application on Appointment of Auditor)

The amendments to Article 4 (2) and (3) shall apply from the ordinary general meeting which shall

be convened for the first time after April 1, 1997 for the approval of the appointment of an auditor.

■■■■ Article 4 (Examples of Application on Auditor of Listed Corporations)Article 4 (Examples of Application on Auditor of Listed Corporations)Article 4 (Examples of Application on Auditor of Listed Corporations)Article 4 (Examples of Application on Auditor of Listed Corporations)

The amendments to Article 4-2 shall apply according to the classification of following

subparagraph:

1. In case of a company whose period for the settlement of accounts is not December, and a

corporation whose period for the settlement of accounts is December, but whose auditors of the

2 business years immediately preceding January 1, 1997 are different from each other, the

amendments shall begin to apply upon the appointment of the auditor of the business year which

starts for the first time after January 1, 1997;

2. In case of a company whose period for the settlement of accounts is December, and whose

auditor for the period of the 5 immediately preceding business years before January 1, 1997 is

same, the amendments shall begin to apply upon the appointment of the auditor of the business

year which starts for the first time after January 1, 1999; and

3. In case of a company which does not fall under subparagraphs 1 and 2, the amendments shall

begin to apply upon the appointment of the auditor of the business year which starts for the first

time after January 1, 1998.

■■■■ Article 5 (Examples of Application on Submission, etc. of Audit Report)Article 5 (Examples of Application on Submission, etc. of Audit Report)Article 5 (Examples of Application on Submission, etc. of Audit Report)Article 5 (Examples of Application on Submission, etc. of Audit Report)

The amendments to Article 8 (1) shall begin to apply as to the audit report which shall be

submitted after April 1, 1997.

■■■■ ArArArArticle 6 (Examples of Application on Collection of Management Control Fees)ticle 6 (Examples of Application on Collection of Management Control Fees)ticle 6 (Examples of Application on Collection of Management Control Fees)ticle 6 (Examples of Application on Collection of Management Control Fees)

The amendments to the latter part of Article 15 (5) shall apply on and after the fiscal year to which

the enforcement date of this Act belongs in case of an accounting corporation (including joint

accounting offices which is deemed to be auditor pursuant to Article 8 of the Addenda), and in

case of an audit team, shall apply to the audit remuneration under the audit contract concluded

after January 1, 1996.

■■■■ Article 7 (Transitional Measures on Appointment of Auditor)Article 7 (Transitional Measures on Appointment of Auditor)Article 7 (Transitional Measures on Appointment of Auditor)Article 7 (Transitional Measures on Appointment of Auditor)

A company, which has concluded an audit contract and has not received an audit report, from

among those whose business year started after February 1, 1996, and a company whose business

year starts on January 1, 1997 may, notwithstanding the previsions of Article 4 (1) and (2) and the

amendments to the provisions of Article 4-2 (1), appoint or replace an auditor through a

resolution of the board of directors upon the proposal of the statutory auditor until May 31, 1997:

provided, That the foregoing shall not apply to a company which appoints an auditor upon the

approval from the ordinary general meeting of shareholders pursuant to the purview of the

previous Article 4 (2), or which replaces or selects the person nominated by the Securities and

Exchange Commission pursuant to paragraph (3) of the same Article as an auditor.

■■■■ Article 8 (Transitional Measures on Auditor)Article 8 (Transitional Measures on Auditor)Article 8 (Transitional Measures on Auditor)Article 8 (Transitional Measures on Auditor)

Joint accounting offices, under the previous provisions at the time of enforcement of this Act shall,

notwithstanding the amendments to Article 3 (1), be deemed to be auditors under this Act until

March 31, 1997. In this case, the previous provisions of Article 17 shall apply to the liability of the

joint accounting offices for the damages.



This Act shall enter into force on April 1, 1998.

■■■■ Article 2 (Examples of Application on Combined Financial Statements)Article 2 (Examples of Application on Combined Financial Statements)Article 2 (Examples of Application on Combined Financial Statements)Article 2 (Examples of Application on Combined Financial Statements)

The provisions on preparation of combined financial statements and discipline to the violation,

auditing and keeping and publicly announcing audit reports of affiliated companies under the

amendments to Articles 1-3, 2, 14 (1) and 16 (2) 3 (limited to matters on combined financial

statements) shall apply to the business year starting after January 1, 1999.

■■■■ Article 3 (Examples of Application on Appointment of Auditor, etc.)Article 3 (Examples of Application on Appointment of Auditor, etc.)Article 3 (Examples of Application on Appointment of Auditor, etc.)Article 3 (Examples of Application on Appointment of Auditor, etc.)

An amendment to Article 4 (2) shall apply to an ordinary general meeting first convened after the

entry into force of this Act for the approval of appointment of an auditor.

■■■■ Article Article Article Article 4 (Transitional Measures on Establishment of Securities and Futures Commission)4 (Transitional Measures on Establishment of Securities and Futures Commission)4 (Transitional Measures on Establishment of Securities and Futures Commission)4 (Transitional Measures on Establishment of Securities and Futures Commission)

Any act done by the Securities and Exchange Commission under the previous Article 4-3 or 16 at

the time of the entry into force of this Act shall be deemed to have been done by the Securities

and Futures Commission under this Act.

■■■■ Article 5 (Transitional Measures on Establishment of Financial Supervisory Commission)Article 5 (Transitional Measures on Establishment of Financial Supervisory Commission)Article 5 (Transitional Measures on Establishment of Financial Supervisory Commission)Article 5 (Transitional Measures on Establishment of Financial Supervisory Commission)

Any standards or regulations determined by the Securities and Exchange Commission on approval

by the Minister of Finance and Economy pursuant to the previous Article 5 (2), 13 (1) or 15 (3) at

the time of the entry into force of this Act shall be deemed to have been determined by the

Financial Supervisory Commission after deliberation by the Securities and Futures Commission

under this Act.

■■■■ Article 6 (Transitional MArticle 6 (Transitional MArticle 6 (Transitional MArticle 6 (Transitional Measures on Assessment of Auditor)easures on Assessment of Auditor)easures on Assessment of Auditor)easures on Assessment of Auditor)

Any assessment or approval done by the Minister of Finance and Economy pursuant to the

previous Article 16-2 (1) or (2) at the time of the entry into force of this Act shall be deemed to

have been done by the Securities and Futures Commission under this Act.


(1) (Enforcement Decree) This Act shall enter into force on April 1, 1998.

(2) (Examples of Application on Appointment of Auditor, etc.) An amendment to Article 4 (2) shall

apply to an ordinary general meeting first convened after the entry into force of this Act for the

approval of appointment of an auditor.

(3) (Transitional Measures on Fine for Negligence) The application of fines for negligence to acts

done prior to the entry into force of this Act shall be governed by the previous provisions.

ADDENDUMADDENDUMADDENDUMADDENDUM

This Act shall enter into force on April 1, 2000: provided, That the amended provisions of Articles

4, 8, 10 and 17 shall enter into force on the date of promulgation of the Act.



This Act shall enter into force on April 1, 2001.

■■■■ Article 2 (Applicable Cases for Serial Audit by Auditor)Article 2 (Applicable Cases for Serial Audit by Auditor)Article 2 (Applicable Cases for Serial Audit by Auditor)Article 2 (Applicable Cases for Serial Audit by Auditor)

The amendments to Article 3 (4) through (6) shall apply to the fiscal year beginning on or after the

date this Act takes effect.

■■■■ Article 3 (Applicable Cases for Procedures for Appointing Auditor)Article 3 (Applicable Cases for Procedures for Appointing Auditor)Article 3 (Applicable Cases for Procedures for Appointing Auditor)Article 3 (Applicable Cases for Procedures for Appointing Auditor)

The amendments to Articles 4, 4-2 (1) and (2), 4-3 and 4-5 shall apply to an auditor who is

appointed, appointed for alteration, selected, or dismissed on or after the date this Act takes

effect.

■■■■ Article 4 (Applicable Cases for Appointment of Auditor by AssociationArticle 4 (Applicable Cases for Appointment of Auditor by AssociationArticle 4 (Applicable Cases for Appointment of Auditor by AssociationArticle 4 (Applicable Cases for Appointment of Auditor by Association---- Registered Registered Registered Registered

Corporation)Corporation)Corporation)Corporation)

Th amendments to the former part of Article 4-2 (1) shall apply to the business year beginning on

or after the date this Act takes effect.

■■■■ Article 5 (Transitional Measures concerning Application of Accounting Audit Standards)Article 5 (Transitional Measures concerning Application of Accounting Audit Standards)Article 5 (Transitional Measures concerning Application of Accounting Audit Standards)Article 5 (Transitional Measures concerning Application of Accounting Audit Standards)

Until the KICPA sets the accounting audit standards with approval of the Financial Supervisory

Commission under the amendments to Article 5, the auditing standards under the previous

provisions shall apply.

■■■■ Article 6 (Applicable Cases for Publication of Violations)Article 6 (Applicable Cases for Publication of Violations)Article 6 (Applicable Cases for Publication of Violations)Article 6 (Applicable Cases for Publication of Violations)

The amendments to Article 6-2 shall apply to any violations confirmed on or after the date this

Act takes effect.

Source: http://www.moleg.go.kr/ Access time: 05/08/2003

http://www.moleg.go.kr/

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