Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
KRX to help Kosdaq-listed firms prepare external audit
The Korea Exchange office on Yeouido, Seoul / Courtesy of Korea Exchange
By Jhoo Dong-chan
The Korea Exchange (KRX) is helping the nation's small- and medium-size enterprises (SMEs) listed on the secondary Kosdaq prepare for an external audit.
Reflecting an increasing number of SMEs delisted from the Seoul bourse after receiving an “unqualified” opinion from accounting firms, the KRX has introduced various measures to help these firms since April.
“Related laws on external audit on listed firms have been tightened since Nov. 1 to eradicate accounting fraud and poor audits,” said a KRX official.
“Unlike big conglomerates, Kosdaq-listed SMEs are experiencing difficulties to counter tightened audits conducted by external accounting companies. An increasing number of firms were delisted from the bourse this year due to the strengthened laws.”
According to data released by the KRX, 30 firms have been delisted from the bourse so far this year, up 66 percent from the previous year's figure of 18 companies.
“Most domestic SMEs cannot afford to hire a certified public accountant (CPA),” the official said.
“They are literally defenseless to the enhanced audit system. The KRX's move is to help them prepare the audit.”
The KRX has conducted a series of conferences to introduce the enhanced audit standards with CEOs of SMEs in Daegu and North Gyeongsang Province.
Along with its conferences, the KRX also established an educational program to enhance their accounting management systems. It also partnered with the Korean Institute of Certified Public Accountants as well as the “big four” domestic accounting firms to strengthen its educational program.
“The KRX will do its best to provide proper assistance for listed SMEs in partnership with qualified CPAs,” the official said.
“I hope the agency's efforts will help facilitate their accounting management system.”
On Nov. 1, lawmakers revised related laws to introduce the Korean version of the Sarbanes-Oxley Act to prevent possible accounting fraud and poor audits.
Introduced in 2002, the act was established to set new or expanded requirements for all U.S. company boards, management and public accounting firms to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. The act followed a number of major corporate and accounting scandals, including those involving Enron and WorldCom.
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