South Korea's top financial regulator said Tuesday the authorities will take tougher measures against accounting-related wrongdoings as part of its effort to enhance the transparency of the nation's corporate finance system.
Yim Jong-yong, chairman of the Financial Services Committee, described accounting as the "mirror of the economy and a core infrastructure."
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Yim Jong-yong, chairman of the Financial Services Committee, speaks at a public hearing on accounting practices held at the National Assembly in Seoul on March 7, 2017. (Yonhap) |
"As to window-dressing and incomplete audits, (violators) will be subject to sanctions at the same level as those against unfair trade like stock price rigging," he said during a public hearing on corporate accounting practices here held at the National Assembly.
His remarks reflect the government's resolve to improve accounting practices in Asia's fourth-largest economy.
Yim cited the negative impact from accounting-related malpractices as shown in the 2008 global financial crisis. At that time, Lehman Brothers was accused of using "accounting gimmicks" to hide its huge debts, leading to failure in sending an early warning.
Accounting, if done well, can serve as important ground for rational decision-making by companies and investors and also help ease the information divide, he added.
But South Korea's accounting transparency lags behind other countries with large economies. It ranks among the lowest in the field in surveys carried out by the International Institute for Management Development and World Economic Forum.
Yim said the government will set up a system to regularly review accounting at all listed firms. (Yonhap)
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