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Companies Subject to External Audit
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2021-03-31
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Companies Subject to External Audit 

(Revision on ACT ON EXTERNAL AUDIT OF STOCK COMPANIES) 



1. Before revision) Unlisted companies subject to external audit

   -. As of the end of the immediate preceeding year

       OR  ①  with total amount of assets of at lease 12 billion won

            ② with total amount of assets of at least 12 billion won and total amount of                

                debts of at least 7 billion 

            ③  with total amount of assets of at least 7 billion and at least 300 employees 


2. After revision) Unlisted companies subject to external audit

   -. Small scale incorporation : as of the immediately preceeding year 

     (when it belongs three out of four items it is exempt from audit)

       ①  assets less than 12 billion won ②  debts less than 7 billion won

       ③  sales less than 10 billion won  ④  employees fewer than 100


   -. Small scale limited-liability company 

    : as of the immediately preceeding year ( when it belongs to three out of five below it is exempt from audit)

       ① assets less than 12 biliion won  ②  debts less than 7 billion won

       ③ sales less than 10 billion won   ④  employees fewer than 100 

       ⑤ employees fewer than 50

  

      ㅇProvided, in case of changing the type of firm from incorporation to limited 

         liability company after the enforcement of the reformed law (2019, 11,1) criteria 

         for incorporation should be applied for five years


  -. Large-scale corporations : at least 50 billion won in asset and sales


3. Appoinment period of auditor for unlisted companies after reform of law:

       within 45 days from the business year starting from 2018.11.1

      * Initial audit should be done within 4 months

      * Appointed by audit (audit committee)  

      

4. Accountability of reformed provisions for the subject of external audit

 1) In case of an incorporation which is subject to external audit before 2018. 11.1 and also the case after the reform the reformed provisions should be applied to the business year starting from 2018.11.1. 


 

2) In case of an incorporation which is not subject to external audit before November 1, 2019 and also the case after the reform the reformed provisions should be applied to the business year starting from 2018.11.1. The subparagraph 2 of Article two of ENFORCEMENT DECREE OF THE ACT ON EXTERNAL AUDIT OF STOCK COMPANIES should be applied to the business year that starts on November 1, 2019.



3) Incorporations which is not subject to external audit under the former regulations before 2018.11.1. the regulation should be applied from the business year that starts after 2019.11.1.


4) In terms of limited-liability companies it should be applied from the business year which starts from the date that passed 365 days from 2018.11.1.

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