Korean regulator amends external audit rules

The Korean Financial Services Commission has
amended its regulations on external audit and accounting.

The amendments are intended to reform the
enforcement decree on external audit. They also clarify which
company is responsible for preparing consolidated financial
statements.

The amendments state that the ultimate parent
company of a subsidiary that uses accounting standards for
non-public entities will be the only company required to present
consolidated financial statements.

In contrast, the preparation of financial
statements under IFRS requires that the subsidiary company also
presents consolidated financial statements.
In addition, a subsidiary that faces liquidation or is not subject
to external audit is excluded from consolidated financial
statements of its parent company.

The Korean FSC approved the amendments on 26
May.