The Financial Supervisory Service announced on the 28th that it held an information session on "Designating outstanding corporations for accounting and audit governance structure exemption" at the Mapo Securities Association building in Seoul. This session was co-hosted by the Financial Services Commission, Korea Corporate Governance Network, KOSDAQ Association, and the Korea ESG Standards Institute.
This session was organized to introduce the background and evaluation criteria for the implementation of the "periodic exemption system for outstanding corporations in accounting and audit governance structure" scheduled to start this year. The system is focused on exempting outstanding corporations from the "periodic designation system for external auditors" for three years (one term).
Listed corporations are required to freely appoint external auditors for six years and then undergo audits by auditors designated by the financial authorities for three years. The purpose of this system is to extend the free appointment period of auditors to nine years for corporations with excellent accounting and audit governance, after which the auditors are designated.
The session began with an opening remark from Professor Choi Jong-hak of Seoul National University, the first chairperson of the Accounting and Audit Governance Evaluation Committee, followed by explanations of the system by related agencies such as the Financial Services Commission, Financial Supervisory Service, and Korea ESG Standards Institute. About 150 officials from over 110 corporations attended the session, and after the introduction by financial authorities, a question-and-answer session regarding the system's operation followed.
Chairperson Choi noted, "I will do my best for a successful implementation," and added, "I will closely evaluate efforts for accounting transparency, including the auditor appointment process and the practical monitoring activities of the audit committee."
Applications for the periodic exemption system will start being accepted in June.