On Apr. 11, 2025, SK FSS reminded that companies with a Dec. fiscal year-end which become subject to external audit for the first time in 2025 must appoint an auditor by end-Apr. 2025, report the appointment to SK FSC within 2 weeks of signing a contract.
Failure to appoint an auditor and report the fact may result in disadvantages including designation of an auditor; SK FSS will provide guidance on the criteria for external audits, auditor selection entities, appointment procedures, and electronic reporting.
On Dec. 12, SK FSS issued guidance on FY2025 auditor appointment.
SK FSS provided guidance on the appointment of external auditors for FY2025.
Follows SK FSS Dec. 2023 issued guidance on auditor appointments, see #194827.
Guidance
Companies must confirm/comply with appointment procedures according to their listing status and asset size; auditors may be appointed where companies violate legal requirements such as the deadline of appointing auditors, auditor selection process.
First, companies must appoint external auditors within 45 days from the start of the fiscal year, by Feb. 14, 2025; those obliged to set up an audit committee can do so by Dec. 31, 2024, and those not audited in the previous fiscal year by Apr. 30, 2025.
Second, companies may appoint auditors per fiscal year, but listed, large unlisted, and financial companies must appoint the same auditor for three consecutive fiscal years.
Third, companies may appoint an accounting firm or an audit team as auditor, but large unlisted and financial companies must only appoint an accounting firm as auditor.
Listed firms must appoint an auditor among the 40 accounting firms currently registered with SK FSC as auditors for listed companies; fourth, for companies which have an audit committee, audit committee should appoint companies' external auditor.
For listed, large unlisted, financial firms without an audit committee, internal auditors must appoint external auditors with the auditor appointment committee's approval.
For other unlisted firms, internal auditors shall select external auditors, but if firms are allowed not to have internal auditors by law, companies may select external auditors.
Fifth, firms must report auditor appointment to SK FSS within 2 weeks from the date of an audit contract, but reporting may be exempt where auditors are not changed.
However, where listed, large unlisted, and financial companies appoint auditors after obtaining approval from the audit (appointment) committee, they must report every time when auditors are appointed, regardless of whether auditors are changed.
Future Plans
SK FSS will disseminate these precautions to companies through related associations.
As well as hold briefing sessions in Jan. 2025, and provide guidance through Q&As.
Apr. 2025 Reminder
On Apr. 11, 2025, SK FSS reminded that companies with a Dec. fiscal year-end which become subject to external audit for the first time in 2025 must appoint an auditor by end-Apr. 2025, report the appointment to SK FSC within 2 weeks of signing a contract.
Failure to appoint an auditor and report the fact may result in disadvantages including designation of an auditor; SK FSS will provide guidance on the criteria for external audits, auditor selection entities, appointment procedures, and electronic reporting.
