Small and medium-sized firms will be subject to tougher punishment if they are found to have engaged in accounting irregularities under revised regulations, the financial watchdog said Thursday.
If accounting irregularities worth 5 billion won ($4.4million) or more are found at a small firm, financial authorities could punish the company regardless of the company's size, the Financial Supervisory Service said.
Currently, punishments for accounting irregularities can 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 its efforts to toughen rules on corporate accounting standards.
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 against companies with accounting irregularities.
Under the latest accounting reform measures, chief executives of a company or an accounting firm will face "stern punishment" if they are involved in accounting irregularities, FSS officials said. (Yonhap)