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By Anna J. Park
In matters of corporate accounting management, Korean corporations turn out to have particular weaknesses regarding internal money controls and irregularities caused by high-ranking management officials.
This is according to a report published on Wednesday by Samjong KPMG, which surveyed internal accounting control systems conducted by 94 companies in Korea and 197 companies in the U.S. in 2021. The report compared the differences in the internal accounting control systems practiced in Korea and the U.S.
Lack of internal money controls and irregularities by high-ranking corporate management officials together accounted for 30.3 percent of the reasons behind audit qualified opinions for the Korean companies surveyed in 2021.
A qualified opinion is issued by an auditor upon finding deviations in a company's financial statements, and differs from an unqualified opinion, which is issued when the auditor finds the financial statements to be fairly and appropriately presented.
The two issues: lack of internal money controls and management irregularities were only identified in three cases out of the 197 U.S. companies surveyed.
The report pointed to some embezzlement scandals this year, such as the misappropriation of hundreds of billions of won by an employee from Osstem Implant at the start of the year, to demonstrate Korean companies' lack of internal money controls. The paper went on to advise Korean companies to strengthen control systems concerning company funds and capital in various layers that guarantee cross-checks.
A lack of expertise, of accounting officials, was a common issue pointed out in both Korean and American companies, registering 19.9 percent and 23 percent, respectively.
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