On Nov. 11, SK FSS guided on disclosing financial misconduct control.
SK FSS issued detailed guidelines for disclosing control activities of listed and large unlisted companies to prevent, detect embezzlement and other financial misconduct.
Follows SK FSS proposed postponing financial control disclosures same day, #232975.
Overview of Guidelines
SK FSS revised the Internal accounting evaluation and reporting guidelines, to require companies to describe control activities performed and results of internal inspections.
Descriptions required are confined to directly related control activities to prevent and detect fraud risks related to funds among the overall control and financial control.
Plus, the department and the period of conducting internal inspections, and corrective plans or implementation results for identified vulnerabilities shall be specified.
SK FSS presented disclosure examples and FAQs, to prevent excessive disclosures; will disseminate disclosure forms for financial misconduct control and reference materials, and hold a briefing session in Dec. 2024 to provide detailed guidance.
Next Steps
Disclosures on control activities shall be conducted from 2025 by listed companies with assets of KRW 100bn+ subject to internal accounting audit, large unlisted financial companies with assets of KRW 100bn+ subject to a review for internal accounting.
In addition to listed financial companies with assets of less than KRW 100bn.
For listed non-financial companies with assets of less than KRW 100bn and the rest of large unlisted companies, the disclosure obligation will be implemented from FY2026.
