The Financial Services Commission's Securities and Futures Commission on the 8th decided to designate an auditor for Raon Holdings due to violations of accounting standards.
The Securities and Futures Commission held its 9th meeting on this day and decided to designate an auditor and take other measures against Raon Holdings, which violated accounting standards in its preparation and disclosure of financial statements. Additionally, it decided to limit the audit work of the Shinbo Certified Public Accountant's Audit Team and its affiliated certified public accountants for their negligence in audit procedures.
Also, it took measures such as audit work restrictions against auditors and affiliated certified public accountants who violated the 'External Audit Act of Stock Companies' regarding continuous audit work restrictions for the same directors.
Raon Holdings, a non-listed company, inflated its equity by overestimating revenue and underestimating expenses by including capitalized financial costs and demolition costs in the progress evaluation of construction projects that should be excluded from 2021 to 2023.
It also did not offset the subscription receivables (assets) and subscription payables (liabilities) for each subscriber of ongoing subdivisions, and incorrectly classified borrowings due within one year from the end of the reporting period as non-current liabilities instead of current liabilities.
The Securities and Futures Commission decided to impose a penalty surcharge and a two-year audit work restriction on Raon Holdings due to negligence in the audit procedures related to capitalized financial costs, subdivision revenues, and costs, as well as subscription receivables and payables, and classification of borrowing fund liquidity.
It also imposed audit work restrictions on the responsible certified public accountant, a one-year audit work restriction for listed companies and designated companies, and measures such as job training.
Additionally, it decided to impose additional contributions to the compensation joint fund and audit work restrictions on three accounting firms, including Jeongan, Jipyeong, and Roel, which violated regulations on continuous audit work restrictions for the same directors. The affiliated certified public accountants also faced audit work restrictions and job training.