News / Press Releasemore
South Korea’s National competitiveness in auditing and accounting practices has soared for the second consecutive year
South Korea’s National competitiveness in auditing and accounting practices has soared for the second consecutive year Switzerland-based International Institute for Management Development(IMD) announced,61st in 2019 → 46th in 2020 → 37th this year, jumped 24 positions for the last two years□ The Korean Institute of Certified Public Accountants (President Young-Sik Kim) announced on the 21st that South Korea ranked 37th out of 64 countries under “auditing and accounting practices“ category in this year’s Switzerland-based International Institute for Management Development(IMD) national competitiveness index.□ Korea has been around the bottom of the auditing and accounting practices category for seven years since 2013, but it climbed 15 notches from 61st to 46th in 2020, and climbed nine notches to 37th this year. In particular, Korea is the only country that has risen vertically by more than 20 spots in the past two years. With the implementation of amended act of external audit including‘periodic designation of auditors’, ‘standard audit hours’, ‘internal accounting control system’, it is attributed to the government's institutional support for early settlement of accounting and audit reform, accounting firms’ efforts to improve audit quality, and positive changes in companies' perception of accounting transparency.□ “The hard-earned accounting reforms have been well-received at home and abroad and are showing remarkable results. By smoothly establishing accounting and audit reform acts, such as periodic designation of auditors and standard audit hours, it is necessary to further raise national competitiveness by enhancing accounting transparency and abolishing the Korea discount.”, said President Young-Sik Kim.
- KICPA raises relief fund for flood victims The KICPA raised a KRW200 million-relief fund for flood victims under the name of 23,000 CPAs. Half of the fund will be donated to the Seoul office of the Korean Red Cross, and half of them will go to regional offices of the Korean Red Cross via regional branches of the KICPA. Young-sik Kim, President of KICPA, said, “There are many victims battling the double whammy of Covid-19 and floods. I hope the relief fund would be helpful for the victims to get back to the normal routine.” 2020.09.16
- KICPA announces the Standard Audit Hours (SAH) auditors need to spend The KICPA announced the Standard Audit Hours (SAH) auditors need to spend on 14th February, 2019, in order to improve audit quality and protect stakeholders, including investors. The SAH includes safeguards for audit clients as well to minimize companies’ burdens arising from the implementation of a new scheme. For this, the KICPA opened public hearing twice to collate various opinions from the information provider group and user group. The SAH describes that the increase rate of audit hours should not exceed 30% (50% for companies whose assets exceeding KRW 2 trillion) in case the SAH of a company increases more than 30% (50% for those whose assets exceeding KRW 2 trillion) from that of previous year. In addition, the SAH can be phased in or delayed to companies with assets less than KRW 2 trillion. As for SMEs with assets less than KRW 20 billion, they are exempted. 2019.10.02
- KICPA announces the Code of Conduct for Professional Accountants The KICPA announced the Code of Conduct for Professional Accountants on 16th October, 2018. The Code was prepared by a TF composed of Big4, SMPs and other relevant stakeholders and approved by the KICPA Council on 12th. The Code describes specifically what professional accountants comply with during which they perform audits. For one, auditors are not allowed to go golfing or entertainment bars/clubs with their clients, even though the bills are paid separately. The Code also includes a provision for the protection of audit clients from unduly costs or documentations. 2019.10.02
- KICPA publishes practice manual on accounting standards for non-for-profit entities The KICPA co-hosted a book launch event with the KB Kookmin Bank on 4th September in 2018. In March, the KICPA inked the cooperation MoU with the KB Bank to improve accounting transparency of non-for-profit entities and published the practice manual on accounting standards for non-for-profit entities and conducted accounting/taxation trainings to employees in the entities. The manual is designed to support employees of non-for-profit entities that have difficulties with applying accounting standards in practice via provision of illustrative examples. 2019.10.02