The central government prepares its financial statements pursuant to the National Accounting Standards, based on the National Accounting Act enacted in October 2007. The financial statements of the central government are prepared using the accrual basis of accounting.
National Accounting Standards Center
The central government established the National Accounting Standards Center in 2010 with the objective of preparing its financial statements using the accrual basis of accounting and entrusted the KICPA with the operation of the Center. The National Accounting Standards Center performs various duties such as collaborating in the formation of national accounting standards and revisions thereof, review of interpretations of standards and assessment of inquiries, support in the settlement of accounts for the government and other public institutions, facilitation of national accounting education initiatives, and providing practical guidelines to corporate executives in charge of accounting.
Account Settlement Support Group
Under the agreement with the KICPA, the central government commissions an account settlement support group comprised of CPAs, with the aim in promoting the advancement of national accounting and supporting the government’s account settlement.
Accounting Standards for Local Governments
Local governments prepare their financial statements pursuant to the Accounting Standards for Local Governments established in October 2006, enacted by the Local Finance Act as revised in August 2005. The standards are based on the accrual basis of accounting.
External Review of Financial Statements for Local Governments
Local governments’ financial statements are subject to external review conducted by CPAs in accordance with the relevant act.
Accounting Standards for Public Institutions
Public Institutions refer to state-owned entities, quasi-governmental institutions, and other government regulated entities as prescribed by the relevant act. They are required to prepare their financial statements pursuant to the Regulation on Accounting for State-Owned Entities and Quasi-Governmental Institutions. The Regulation is based on the accrual basis of accounting.
External Review of Financial Statements for Public Institutions
Public institutions' financial statements are subject to external review conducted by CPAs in accordance with the Act on the Management of Public Institutions.
Accounting Standards for Nonprofit Organizations
Nonprofit organizations can be generally categorized as educational institutions, medical institutions, social welfare foundations, and others. Each prepares financial statements pursuant to relevant rules and regulations based on the accrual basis of accounting.
External Review of Financial Statements for Nonprofit Organizations
Private education institutions, medical institutions operating a certain number of hospital beds, and other non-profit organizations with assets over a certain amount are subject to external review conducted by CPAs.
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