BUSINESS

Regulator to conduct more inspections into accounting practices at big firms

By Yonhap
  • Published : Oct 12, 2018 - 15:46
  • Updated : Oct 12, 2018 - 15:46

The financial regulator said Friday it will conduct more inspections into accounting practices at big companies as part of its efforts to toughen rules on corporate accounting standards.

In a report for a parliamentary audit, the Financial Supervisory Service said big firms with assets worth more than 1 trillion won ($880 million) accounted for 7 percent of the watchdog's annual inspections into accounting practices last year.

The ratio rose to 20 percent this year, the FSS said.


(Yonhap)

In the first eight months of this year, the FSS conducted a total of 176 inspections into accounting practices.

Of them, the FSS found that 28 cases violated accounting rules, and relevant firms will face punishment.

Compared with other advanced nations, South Korea still lags far behind in overall accounting standards.

To regain investor confidence, the government has drastically hiked fines assessed in cases of accounting irregularities.

The FSS has also stepped up its monitoring of accounting practices at the nation's top 50 companies.

The FSS said it will swiftly launch a probe into cases of stock price manipulation or unfair trading cases using short selling.

Some retail investors have been suffering from their investment into stocks related to merger and acquisition activities by firms with little capital.

Such merger and acquisition activities are often targeted for speculative investment or stock manipulation, Yoon told lawmakers.

Yoon said he will discuss a plan to set up a comprehensive supervisory body to monitor unfair stock transactions with relevant authorities, including the Financial Services Commission and the Korea Exchange.

Meanwhile, the FSS chief said he "personally feels a need to promptly push to regulate cryptocurrency tradings."

"(The government has taken) a cautious stance, as the digital currency bears many uncertainties and no unified global rules exist," Yoon said. "(The government) should make efforts toward creating regulations."

The exchanges go largely unregulated in South Korea, as they are not recognized as financial products, though the government has put forward some measures to curb speculative transactions. (Yonhap)



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