Accounting violations to be punished more equallySmall- and medium-sized firms will be subject to tougher punishments if they are found to have engaged in accounting irregularities under revised regulations, the financial watchdog said Thursday.
If accounting irregularities totaling 5 billion won ($4.4 million) or more are found at a small firm, financial authorities could punish the company regardless of its size, the Financial Supervisory Service (FSS) said.
Punishments for accounting irregularities can currently be reduced if a company is below a certain size. The new regulation will go into effect in April next year, the FSS said.
Financial authorities have required accounting firms to submit transparency reports as part of efforts to toughen rules on accounting standards.
Compared with other advanced nations, Korea still lags far behind in overall accounting standards.
To regain investor confidence, the government has drastically increased fines against companies found to have violated accounting rules. Under the latest accounting reform measures, chief executives of a company or an accounting firm will face “stern punishment” if they commit accounting irregularities, FSS officials said.