Lawmaker seeks to limit accounting firms’ involvement in M&A

[THE INVESTOR] Accounting firms could be prohibited from arranging and representing clients in corporate mergers and acquisitions deals.

On Aug. 22, Rep. Park Yong-jin of the main opposition The Minjoo Party of Korea proposed a revision to the Financial Investment Services and Capital Markets Act that would allow such services to be provided only by those licensed as financial investment businesses.

At present, arranging and representing clients in M&A deals does not require a financial investment business license. 

“Accounting firms, which carry out audits acting as agents in acquisitions and mergers could damage the credibility of audits, and could cause conflicts of interest,” Park said.

He also said that as M&A deals involve the trading of shares, related services should come under financial investment regulations.

By Choi He-suk (cheesuk@heraldcorp.com)