The Financial Services Commission issued a notice of legislative change (a revision bill of the Enforcement Decree of the Act on External Audit of Stock Companies) as a follow-up to the previously announced (June 12) plan to make improvements to the accounting regulations.

The revision bill contains a provision postponing the requirement of external audit on the consolidated internal accounting control system for small- and medium-sized stock companies (those with assets less than KRW2 trillion) for five years until 2029.

For stock companies with assets worth KRW2 trillion or more, the external audit requirement will be enforced as scheduled starting from this year, but those applying for postponement can get a maximum two-year postponement after having a review conducted by the authorities. Those wishing to apply for a postponement should submit applications within the application period (from September 1 to 8). The Securities and Futures Commission (SFC) will then review applications submitted by qualified businesses only and decide whether to grant postponement at a regularly scheduled meeting in November. The companies that have been granted postponement will need to disclose this and the reason for postponement in their business reports.

This revision bill will be put up for public comment between August 16 and September 25, while the authorities seek to implement the revision starting from January 2024.

* Please refer to the attached file for details.