The nation’s top financial regulator on Friday urged accounting firms to commit to a rigorous audit of troubled savings banks to uproot accounting fraud.
Financial Supervisory Service Gov. Kwon Hyouk-se pinpointed the lack of transparency in financial reports in the industry at a breakfast meeting with chiefs of the industry’s 13 biggest accounting firms.
“Transparency is an essential element in a trusted relationship between banks and the public, and demand for honest reporting is growing,” Kwon said.
“Accounting firms need to pay special attention to banks with higher audit risks. The auditing process will need to be strict enough to help regain public trust in savings banks, and to prevent future accounting fraud in the industry,” he added.
The secondary banking sector is undergoing a drastic restructuring after the regulator suspended 16 of them this year for failing to secure enough capital. The government has moved to push financial firms to buy the distressed savings banks to prevent shocks to the country’s broader financial system.
The secondary banking sector has a total of 86.89 trillion won in assets as of 2010 year-end.
By Cynthia J. Kim (
cynthiak@heraldcorp.com)
