Doing Business Guide

Statutory audit requirements (non-listed companies)

Under the amended external audit and accounting regulations of Korea that came into force from November 1, 2018, a non-listed stock company (Chusik Hoesa) shall be subject to annual statutory external audit requirement in Korea if the company satisfies any of the following conditions as of the end of immediately preceding fiscal year.

(1) Assets of KRW 50 billion or more

(2) Sales of KRW 50 billion or more (shall be annualized if a company was in operation for less than 12 full months)

(3) If meets 2 or more of the following conditions:

(i) Assets: KRW 12 billion or more

(ii) Liabilities: KRW 7 billion or more

(iii) Sales: KRW 10 billion or more

(iv) Number of employees: 100 employees or more

Previously Yuhan Hoesa was not subject to annual statutory external audit in Korea. However, under the amended regulations, Yuhan Hoesa shall also be subject to annual statutory external audit requirement starting from November 1, 2019 if the company satisfies any of the following conditions as of the end of immediately preceding fiscal year.

(1) Assets of KRW 50 billion or more

(2) Sales of KRW 50 billion or more (shall be annualized if a company was in operation for less than 12 full months)

(3) If meets 3 or more of the following conditions:

(i) Assets: KRW 12 billion or more

(ii) Liabilities: KRW 7 billion or more

(iii) Sales: KRW 10 billion or more

(iv) Number of employees: 100 employees or more

(v) Number of members: 50 members or more

A standard for large scale companies is also newly introduced in the amended regulations. Companies having KRW 50 billion or more of total assets or sales will no longer be treated as a small sized company and become subject to annual statutory external audit.