Dong-Ah, Auditor Face Probe

The Financial Supervisory Service has begun a review of the audits of Dong-Ah Construction Industrial Co.

A senior official at the regulatory agency said Wednesday, "We have initiated a review on two fronts. The first is following up on allegations of large-scale financial statement fraud at the construction company, and the second is the potential effects of the irregularities on the prospective sale of the company."

The official said the agency has begun collecting data and working papers from the company and the accounting firm Ahn Kwon & Co., which handled the 1997 financial statement audit.

The agency's head of audit review, Chung Yong-sun, said, "The review will focus on the 1997 fiscal year, for which we have an auditor's report, and the statute of limitations is still running." The agency will send the case to prosecution if there is any evidence of management fraud or intentional oversight by the CPA firm, he said.