Forum in Busan to discuss how to supervise accounting firms


Global audit regulators are likely to map out new standards in oversight of accounting firms during their scheduled gathering in Korea this month.

The 11th plenary meeting of the International Forum of Independent Audit Regulators is slated for April 16-18 in the nation’s second-largest city of Busan.

For the local industry, the Financial Supervisory Service of Korea stressed the significance of the meeting in terms of advanced countries’ direct oversight of local accounting firms.

“Korean accounting firms that audit Korean enterprises listed on stock markets in America are being placed under direct supervision of the U.S. Public Company Accounting Oversight Board,” an FSS director general said Sunday.

“Amid the situation that accounting firms have recently been under closer monitoring from both local and overseas regulators, the need to establish new standards has grown,” he said.

The U.S.-based PCAOB, which was set up after the 2002 Enron accounting scandal, has dispatched inspectors to Korea’s major accounting firms such as Samil PwC and Samjong KPMG over the past few years.

“We are monitoring the coming agreements and new regulatory standards among international regulators,” said an executive of Samil PwC.

The FSS official and Samil PwC executive shared the view that more detailed guidelines could be drafted during the Busan gathering.

Among the issues are vitalizing the signing memoranda of understanding among member countries for effective inter-country supervisions and avoiding redundant inspections.

The IFIAR, composed of 38 members including the U.S., the U.K., France, Germany, Australia and Japan, is an organization for global coordination in the accounting regulatory sector.

Since its establishment in 2006, its plenary meeting has been held twice a year ― every April and October.

Its chairman is Paul George, director of the Auditing and the Professional Oversight Board at the UK’s Financial Reporting Council, and vice-chair is Daniel Goelzer, a board member of the U.S. PCAOB.

Observers for the meeting include representatives from the World Bank, the Financial Stability Board, the International Organization of Securities Commissions, and the International Association of Insurance Supervisors.

About 150 officials from the members and observer organizations are scheduled to participate in the 11th meeting.

Since September 2011, Korea’s regulators ― the FSS and the Financial Services Commission ― have been making their dispositions as chair of the IFIAR meeting.

IFIAR Members are also expected to hold discussions with chief executives of global accounting firms such as PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, Grant Thornton and KPMG.

By Kim Yon-se (kys@heraldcorp.com)