Hyundai Construction Auditor Feels Heat

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Hyundai Construction Auditor Feels Heat

A public advocacy group sought Wednesday a special government investigation into Hyundai Engineering and Construction and its auditor, Samil Accounting Corporation.

"Hyundai Engineering and Construction recorded nearly 3 trillion won ($2.3 billion) of net losses last year, 25 times greater than the 120 billion won in 1999. Considering such an increase, Hyundai Construction and Samil Accounting Corporation may have altered books in 1999 by deliberately failing to reflect an increase in costs and allowances for bad debts," the group, the People's Solitary for Participatory Democracy, asserted.

The group urged the Financial Supervisory Service to investigate Samil over its 1999 audit of the troubled construction firm's books in which Hyundai received an unqualified opinion, meaning its financial condition was reliable. Samil gave the builder a qualified opinion last year after it was unable to verify information provided about the financial condition of Hyundai's overseas operation. The civic organization asked the government agency to investigate last year's audit specifically.

Samil Accounting Corporation, a Korean member firm of Pricewaterhouse Coopers, denied any possibility of the books were manipulated. "The losses were kicked up because we applied more conservative auditing standards due to Hyundai's financial crisis last year," a representative of the accounting firm said.



by Kim Won-bae

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