Change Shines Light on Fraud
Companies will be required to report corrections of past book riggings in their income statements, the Korea Accounting Institute said Sunday. Companies now typically make the corrections in the capital section of their balance sheets.The institute, which runs the Korea Accounting Standards Board, said that firms that begin their 2001 fiscal years in March will be the first affected by the move.
Investors have experienced difficulty identifying the effects of accounting mistakes and deceptions because firms record the corrections as retained earnings carried over from the previous period. The new regulation means the irregularities will show up as gains or losses.
with the Korea JoongAng Daily
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