CERTIFIED PUBLIC ACCOUNTANT ACT

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CERTIFIED PUBLIC ACCOUNTANT ACT — 법갈피

Article 6-2(Certified Public Accountants Qualification and Disciplinary Committee) #

(1) The Certified Public Accountants Qualification and Disciplinary Committee shall be established under the Financial Services Commission to deliberate and resolve on the following matters regarding the acquisition of qualification as a certified public accountant and disciplinary action against a certified public accountant:

1. Matters regarding the acquisition of a certified public accountant qualification;

(a) Matters regarding the examination of a certified public accountant such as subjects of the examination;

(b) Matters regarding the fixed number of persons to be selected in the examination;

2. Matters regarding disciplinary actions against certified public accountants.

(2) The Certified Public Accountants Qualification and Disciplinary Committee shall be comprised of 11 members, including one chairperson.

(3) The chairperson of the Certified Public Accountants Qualification and Disciplinary Committee shall be the Vice Chairperson of the Financial Services Commission, and the following persons shall be members:

1. One person designated by the Chairperson of the Financial Services Commission from among Grade III or higher-ranking public officials of the Financial Services Commission or public officials in general service belonging to the Senior Executive Service of the Financial Services Commission;

2. One person designated by the Chairperson of the Securities and Futures Commission under the Act on the Establishment of Financial Services Commission (hereinafter referred to as the "Securities and Futures Commission") from among members of such Commission;

3. One accounting expert assigned to the Financial Supervisory Service to support the business affairs of the Financial Services Commission and the Securities and Futures Commission pursuant to the Act on External Audit of Stock Companies;

4. One person designated by the President of the Institute of Certified Public Accountants, from among executive officers of such Institute;

5. One person recommended by the head of a corporation or organization which is entrusted by the Financial Services Commission with the business affairs of establishment or amendment of accounting standards under Article 5 (4) of the Act on External Audit of Stock Companies;

6. One person recommended by the Chairperson of the Korea Listed Companies Association established with the permission of the Financial Services Commission pursuant to Article 370 (1) of the Financial Investment Services and Capital Markets Act;

7. One person recommended by the Chairperson of the Korea Chamber of Commerce and Industry established under Article 34 of the Chambers of Chambers of Commerce and Industry Act;

8. Three persons commissioned by the Chairperson of the Financial Services Commission from among the following persons who have extensive knowledge of and experience in accounting or audit, etc.:

(a) A person who has engaged in accounting-related work for at least 10 years after obtaining qualification as a certified public accountant;

(b) A person who majored in accounting, auditing, or relevant fields of law at a school under subparagraph 1, 2, 4 or 5 of Article 2 of the Higher Education Act (hereafter in this item referred to as "school") and graduated therefrom or who is deemed to have an academic background equivalent thereto, currently holding an assistant professorship or higher position or other position equivalent thereto in a school or a research institute officially recognized.

(4) Except as provided in paragraphs (1) through (3), matters regarding the operation of the Certified Public Accountants Qualification and Disciplinary Committee and other necessary matters shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Jul. 11, 2023]

Article 21(Restrictions on Functions) #

(1) No certified public accountant shall be allowed to carry out functions relating to auditing or attesting financial statements (including consolidated financial statements provided for in Article 2 of the Act on External Audit of Stock Companies; hereinafter the same shall apply) for any of the following persons: <Amended on Dec. 11, 2003; Jul. 29, 2005; Oct. 31, 2017; May 19, 2020>

1. Any person (including any company; hereafter in this Article the same shall apply) for whom a certified public accountant or his or her spouse is holding an office of directorship or equivalent position (including a position in charge of works relating to financial matters), or has held such an office during the preceding one year;

2. The certified public accountant or his or her spouse who works or worked as an employee for the preceding one year (in cases of a spouse, limited to an employee who performs financial affairs);

3. Any person, other than those provided for in subparagraphs 1 and 2, who is recognized by Presidential Decree as having obvious interests with a certified public accountant or his or her spouse so as to make it difficult for the certified public accountant to carry out his or her functions fairly.

(2) Any certified public accountant, who is contracted to perform the business auditing or attesting the financial statement of any specific company (where the relevant company prepares consolidated financial statements, having a relationship between parent company and subsidiary prescribed in subparagraph 3 of Article 2 of the Act on External Audit of Stock Companies with another company, including such company), shall be prohibited from performing any of the following business for the relevant company during the contract term: <Newly Inserted on Mar. 29, 2016; Oct. 31, 2017>

1. The business of making accounting records and compiling financial statement;

2. The business of conducting internal audit by agent;

3. The business of creating or operating the financial information system;

4. The business (excluding matters prescribed by Presidential Decree to recover non-performing loans) prescribed by Presidential Decree to sell or purchase assets, capital, and other rights (hereinafter referred to as "assets, etc."):

(a) Inspection, financial reporting, and value assessment of assets, etc.;

(b) Presentation of opinions regarding the sale and purchase of assets, etc. or validity of contracts;

5. Assistance business regarding personnel and organizations, etc.;

6. Insurance actuary business related to calculating the amount of provision for insurance benefits recognized in the financial statement;

7. Consultation on civil and criminal procedure;

8. Arrangement and brokerage related to financing and investment;

9. Decision-making on business administration, such as the disposal and transfer of important assets, and appointment or dismissal, etc. of managers, which falls into the duties of executive officers or persons in positions equivalent thereto;

10. Other business prescribed by Presidential Decree as the one which could incur conflicts of interest with the business auditing and attesting financial statements.

(3) The certified public accountant referred to in paragraph (2) may perform any business other than the business falling under each subparagraph of that paragraph in accordance with the procedures prescribed by Presidential Decree including internal control procedures, etc. <Amended on Mar. 29, 2016>

Article 37-2(Divestiture and Merger after Divestiture) #

(1) An accounting corporation may establish one or several accounting corporations by divestiture.

(2) An accounting corporation may merge with one or several extant accounting corporations after divestiture (hereinafter referred to as "merge after divestiture").

(3) Where an accounting corporation divests or merge after divestiture, it shall prepare a plan for divestiture or a contract for merger after divestiture and refer it to resolution by the general meeting of partners.

(4) An accounting corporation newly established after simple divestiture, accounting corporation succeeding to divestiture, and accounting corporation newly established after merger after divestiture may succeed to reserves for damage compensation under Article 28, joint fund for damages under Article 32 of the Act on External Audit of Stock Companies, audit contracts, and others of the divested accounting corporation prior to divestiture or merger after divestiture as prescribed by a plan for divestiture or contract for merger after divestiture.

(5) Articles 23 and 24 shall apply mutatis mutandis to establishment and registration of an accounting corporation by divestiture or merger after divestiture.

(6) Where an accounting corporation is ordered to suspend all or part of its affairs for a fixed period by the Financial Services Commission pursuant to Article 39 (1), it shall not divest or merge after divestiture during such period.

(7) Articles 234, 237 through 240, 443, 526 (1) and (2), 527 (1) through (3), 527-5 (1) and (3), 528 (1), 529, 530-2 through 530-5, 530-6 (1) through (3), 530-7, 530-9 (1), and 530-10 of the Commercial Act shall apply mutatis mutandis to divestiture or merger after divestiture of an accounting corporation. In such cases, "company" shall be deemed as "accounting corporation", "general meeting of shareholders" as "general meeting of partners", "shareholder" as "partner", "share" as "number of shares" and as for matters concerning resolution of the general meeting of partners, etc. which are prescribed otherwise in provisions concerning limited companies of the Commercial Act, such provisions shall apply mutatis mutandis.

[This Article Newly Inserted on Dec. 31, 2018]

Article 40-8(Cancellation of Registration of Foreign Accounting Corporations) #

Where a foreign accounting corporation falls under any of the following subparagraphs, the Financial Services Commission may order the cancellation of a relevant registration, or suspension of practice in full or in part for a period not longer than one year: Provided, That where a foreign accounting corporation falls under any of subparagraphs 1 through 7, the relevant registration shall be canceled, and Article 39-2 shall apply mutatis mutandis to procedures for the cancellation of registration:

1. Where the registration of a foreign accounting corporation has been canceled or a foreign accounting corporation has been subject to the suspension of practice or other dispositions equivalent thereto in the original qualification nation;

2. Where a foreign accounting corporation has provided services in violation of an order for the suspension of practice;

3. Where a foreign accounting corporation has provided services outside the scope of services in violation of Article 40-3;

4. Where a foreign accounting corporation has made a registration referred to in Article 40-7 (1) by false or other unjust means;

5. Where a foreign accounting corporation has employed certified public accountants registered pursuant to Article 7 (1) in violation of Article 40-10 (1);

6. Where a foreign accounting corporation has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);

7. Where a foreign accounting corporation has established or operated an accounting corporation in joint with certified public accountants or accounting corporations by means of the establishment of corporations, equity sharing and entrustment of management or other methods, in violation of Article 40-10 (3);

8. Where a foreign accounting corporation has failed to use a name including the name of the original qualification nation when indicating its qualification, in violation of Article 40-11 (1);

9. Where a foreign accounting corporation has failed to indicate the name of the original qualification nation and office when establishing a foreign accounting office, in violation of Article 40-11 (2);

10. Where a foreign accounting corporation has failed to indicate the original qualification nation in a place inside or outside the foreign accounting office, in violation of Article 40-11 (3);

11. Where a foreign accounting corporation has failed to expressly state the original qualification nation and scope of services to commissioning persons before entering into commissioning contracts, in violation of Article 40-11 (4);

12. Where a representative director has failed to indicate the original qualification nation and the name of the accounting corporation in or has failed to affix his or her signature and seal to relevant documents, in violation of Article 40-11 (5);

13. Where a foreign accounting corporation has failed to submit a business report within three months after the termination of the relevant business year, in violation of Article 40-13 (1);

14. Where a foreign accounting corporation has failed to comply with the demand of the Financial Services Commission for the submission of data, in violation of Article 40-13 (2);

15. Where a foreign accounting corporation has violated provisions applicable mutatis mutandis in accordance with Article 40-18.

[This Article Newly Inserted on Jun. 30, 2011]

Article 40-17(Disciplinary Actions) #

(1) The Financial Services Commission may take disciplinary actions referred to in Article 48 (2) against foreign certified public accountants in any of the following cases:

1. Where a foreign certified public accountant has provided services outside the scope of services in violation of Article 40-3;

2. Where a foreign certified public accountant has provided services in violation of methods prescribed in Article 40-9 (1);

3. Where a foreign certified public accountant has affiliated to or has been employed by two or more accounting corporations (including foreign accounting corporations) and foreign certified public accountants at the same time or has concurrently held such office in violation of Article 40-9 (2);

4. Where a foreign certified public accountant has employed certified public accountants registered pursuant to Article 7 (1) in violation of Article 40-10 (1);

5. Where a foreign certified public accountant has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);

6. Where a foreign certified public accountant has failed to use a name including the name of the original qualification nation when indicating his or her qualification, in violation of Article 40-11 (1);

7. Where a foreign certified public accountant has failed to indicate the names of the original qualification nation and office when establishing a foreign accounting office, in violation of Article 40-11 (2);

8. Where a foreign certified public accountant has failed to put public notice of the original qualification nation inside or outside the foreign accounting office, in violation of Article 40-11 (3);

9. Where a foreign certified public accountant has failed to expressly state the original qualification nation and scope of services to commissioning persons before concluding commissioning contracts, in violation of Article 40-11 (4);

10. Where a foreign certified public accountant has invested not less than 10/100 of the total amount of capital in an accounting corporation in violation of Article 40-12;

11. Where a foreign certified public accountant has sojourned in Korea for less than 180 days in a year in violation of Article 40-14;

12. Where a foreign certified public accountant has divulged confidential matters he or she knew in the course of providing services inside or outside Korea in violation of Article 40-16;

13. Where a foreign certified public accountant has fallen under Article 48 (1) 1, 3 or 4.

(2) No disciplinary action referred to in paragraph (1) shall be taken three years after the date on which a cause falling under any subparagraph of paragraph (1) occurs.

(3) The procedures for disciplinary actions against certified public accountants shall apply mutatis mutandis to matters concerning disciplinary actions against foreign certified public accountants.

[This Article Newly Inserted on Jun. 30, 2011]

Article 52-2(Imposition of Penalty Surcharges) #

(1) In the case that it has become necessary to take a disposition to suspend the services or the functions of an accounting corporation or a certified public accountant (including a certified public accountant affiliated with the accounting corporation) after he, she, or it is found to fall under Article 39 (1) 5 or 48 (1) 2, the Financial Services Commission may, if such disposition to suspend the services and functions is feared to have a serious impact on interested persons, etc. or harm the public interest, impose a penalty surcharge not exceeding 500 million won on such accounting corporation and a penalty surcharge not exceeding 100 million won on such certified public accountant, respectively in lieu of the suspension of the services or the functions. <Amended on Feb. 29, 2008>

(2) Where the Financial Services Commission intends to impose a penalty surcharge under paragraph (1), it shall take into account matters falling under each of the following subparagraphs: <Amended on Feb. 29, 2008>

1. Nature and extent of the act of violation;

2. Term and frequency of the act of violation;

3. Scale of profits earned by the act of violation.

(3) In the event that a corporation that has violated the provisions of this Act is merged with other corporation, the act of violation shall be deemed committed by a corporation surviving after such merger or a corporation newly incorporated by such merger, on and from which the Financial Services Commission may impose and collect a penalty surcharge. <Amended on Feb. 29, 2008>

(4) Where a corporation in violation of the provisions of this Act divests or merges after divesture, it may impose and collect penalty surcharges by deeming the violations committed by the relevant corporation as those committed by an accounting corporation newly established after simple divestiture, accounting corporation succeeding to divestiture, accounting corporation newly established after merger after divestiture, or divested accounting corporation. <Newly Inserted on Dec. 31, 2018>

(5) Where an accounting corporation on which penalty surcharges were imposed divests or merges after divestiture (including cases of divesting or merging after divestiture on the date of imposition of penalty surcharges), such penalty surcharges shall be paid jointly and severally by an accounting corporation newly established after simple divestiture, accounting corporation succeeding to divestiture, accounting corporation newly established after merger after divestiture, or divested accounting corporation. <Newly Inserted on Dec. 31, 2018>

(6) Matters necessary for standards for imposing the penalty surcharge, etc. under the provisions of paragraphs (1) through (5) shall be prescribed by Presidential Decree. <Amended on Dec. 31, 2018>

[This Article Newly Inserted on Mar. 28, 2001]

Article 52-4(Extension of Period for Paying Penalty Surcharge and Payment of Penalty Surcharge in Installments) #

(1) The Financial Services Commission may grant a person on whom a penalty surcharge has been imposed (hereinafter referred to as "person liable to pay a penalty surcharge") an extension of the deadline for payment of the penalty surcharge or an installment payment of the penalty surcharge under the proviso of Article 29 of the Framework Act on the Administration, and in such cases, if deemed necessary, the Financial Services Commission may require the person to provide security.

(2) If a person liable to pay a penalty surcharge intends to obtain an extension of the deadline for payment of the penalty surcharge or to pay the penalty surcharge in installments pursuant to paragraph (1), he or she shall file an application with the Financial Services Commission no later than 10 days before the deadline for payment.

(3) When a person liable to pay a penalty surcharge who has been granted an extension of the deadline for paying the penalty surcharge or permitted to pay such penalty surcharge in installments under paragraph (1), falls under any of the following, the Financial Services Commission may revoke the decision to grant an extension of the deadline for paying the penalty surcharge or to permit payment in installments and may collect such penalty surcharge in a lump sum:

1. Where the person fails to pay the penalty surcharge agreed to be paid in installments by the deadline for payment;

2. Where he or she fails to comply with a request for the provision of security or commits an act that damages the value of the provided security;

3. Where it is deemed impossible to collect the full or remaining amount of the penalty surcharge due to forced enforcement, commencement of an auction, declaration of bankruptcy, dissolution of a corporation, compulsive collection of national taxes, or disposition on delinquent local taxes, etc.;

4. Where it is deemed possible for the person to pay the penalty surcharge in a lump sum as any cause specified in the subparagraphs of Article 29 of the Framework Act on Administration has ceased to exist;

5. Where any ground equivalent to those specified in subparagraphs 1 through 4 exists.

(4) Matters necessary for the extension of the deadline for paying the penalty surcharge, the payment of penalty surcharge in installments, or the furnishing of security, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Sep. 14, 2023]

Article 53(Penalty Provisions) #

(1) Any of the following certified public accountants (including directors, affiliated certified public accountants and foreign certified public accountants of accounting corporations; hereinafter the same shall apply in this Article) shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 50 million won: <Amended on May 19, 2020>

1. A person who has received, demanded or promised to receive money, valuables or benefits in return for unjust solicitations, or has involved in or consulted on the commissioning person's acquisition of unjust financial benefits by fraud or other improper means, in violation of Article 22 (4) (including provisions applicable mutatis mutandis in Article 40-18);

2. A person who has used a fund reserved for indemnifying damage for purposes, other than the purpose of indemnification of damage without obtaining approval from the Financial Services Commission, in violation of Article 28 (2) (including provisions applying mutatis mutandis in Article 40-18).

(2) Any of the following certified public accountants shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won: <Amended on Jul. 24, 2015>

1. A person who has concealed truth or made a false report intentionally in violation of Article 15 (3) (including provisions applicable mutatis mutandis in Article 40-18);

2. A person who has divulged confidential matters he or she knew in the course of providing services in violation of Article 20 (including provisions applicable mutatis mutandis in Article 40) or 40-16;

3. A person who has employed certified public accountants registered pursuant to Article 7 (1), in violation of Article 40-10 (1);

4. A person who has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);

5. A person who has established or operated an accounting corporation in joint with certified public accountants or accounting corporations by means of the establishment of corporations, equity sharing, entrustment of management or other methods in violation of Article 40-10 (3).

(3) Any of the following persons shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 10million won: <Amended on Jul. 24, 2015; May 19, 2020>

1. A certified public accountant who has audited or attested financial statements in violation of Article 21 (1) and (2) (including provisions applicable mutatis mutandis in Article 33 (2)) or 33 (1);

2. A certified public accountant who has made another person use his or her name or trade name or has lent his or her registration certificate to another person in violation of Article 22 (1) (including provisions applicable mutatis mutandis in Articles 40 and 40-18);

2-2. A person who has arranged the lending of a certificate of registration as a certified public accountant in violation of Article 22 (2) (including provisions applicable mutatis mutandis in Articles 40 and 40-18);

3. A certified public accountant subject to the disposition of suspension of practice referred to in Articles 40-17 or 48 who has provided services referred to in Article 2 or 40-3 during the period of suspension of practice.

(4) When an accounting corporation fails to deposit an amount of money equivalent to the fund reserved for the indemnification of damage, in violation of Article 37 (3), the representative director thereof shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 10 million won. <Amended on Jul. 24, 2015>

(5) Any person qualified as a certified public accountant or any certified public accountant who has provided services referred to in Articles 2 or 40-3 without registration or renewal of registration referred to in Articles 7 (1) and (4) or 40-4 (1) and (5) shall be punished by a fine not exceeding five million won.

(6) Any person who falls under any of the following subparagraphs as a certified public accountant shall be punished by a fine not exceeding three million won: <Amended on May 19, 2020>

1. A person who has established two or more offices in violation of Article 12 (2) (including provisions applicable mutatis mutandis in Article 40-18);

2. A person who has failed to keep records in account books or keep account books in the office in violation of Article 18 (including provisions applicable mutatis mutandis in Article 40);

3. A person who has acquired rights in dispute in violation of Article 22 (3) (including provisions applicable mutatis mutandis in Articles 40 and 40-18);

4. A person who has engaged in competitive business in violation of Article 35 (including provisions applicable mutatis mutandis in Article 40-18).

[This Article Wholly Amended on Jun. 30, 2011]

CERTIFIED PUBLIC ACCOUNTANT ACT

Article 1(Purpose) #

Article 2(Scope of Functions) #

Article 3(Qualification) #

Article 4(Grounds for Disqualification) #

Article 5(CPA Examination) #

Article 5-2(Sanctions against Wrongdoers) #

Article 6(Partial Exemption from Examinations) #

Article 6-2(Certified Public Accountants Qualification and Disciplinary Committee) #

Article 7(Registration) #

Article 8(Refusal of Registration) #

Article 9(Cancellation of Registration) #

Article 9-2(Inquiry into Criminal Records to Verify Grounds for Disqualification) #

Article 10 #

Article 11(Prohibition against Uses of Similar Name or Title) #

Article 12(Establishment of Offices) #

Article 13(Clerks) #

Article 14 #

Article 15(Duties of Impartiality and Good Faith) #

Article 16(Compliance with Bylaws) #

Article 17 #

Article 18(Keeping of Books) #

Article 19(Guarantee of Liability for Damage) #

Article 20(Duty of Confidentiality) #

Article 21(Restrictions on Functions) #

Article 22(Prohibition on Lease of Name or Title) #

Article 23(Establishment) #

Article 24(Registration of Accounting Corporation) #

Article 25 #

Article 26(Directors) #

Article 27(Capital) #

Article 28(Reserves for Damage Compensation) #

Article 29(Restrictions on Contributions in Other Corporations) #

Article 30(Settlement of Accounts) #

Article 31(Name) #

Article 32(Offices) #

Article 33(Restrictions on Functions) #

Article 34(Methods of Rendering Services) #

Article 35(Prohibition of Competitive Practices) #

Article 36(Withdrawal) #

Article 37(Dissolution) #

Article 37-2(Divestiture and Merger after Divestiture) #

Article 38(Report on Change in Articles of Incorporation) #

Article 39(Cancellation of Registration) #

Article 39-2(Hearings) #

Article 40(Provisions to Be Applied Mutatis Mutandis) #

Article 40-2(Definitions) #

Article 40-3(Scope of Services) #

Article 40-4(Registration of Foreign Certified Public Accountants) #

Article 40-5(Rejection to Register Foreign Certified Public Accountants) #

Article 40-6(Cancellation of Registration of Foreign Certified Public Accountants) #

Article 40-7(Registration of Foreign Accounting Corporations) #

Article 40-8(Cancellation of Registration of Foreign Accounting Corporations) #

Article 40-9(Practicing Methods of Foreign Certified Public Accountants) #

Article 40-10(Prohibition of Employment and Partnership) #

Article 40-11(Indication of Qualification) #

Article 40-12(Investment in Accounting Corporations) #

Article 40-13(Submission of Business Reports) #

Article 40-14(Obligation to Sojourn) #

Article 40-15(Submission of Required Documents) #

Article 40-16(Confidentiality) #

Article 40-17(Disciplinary Actions) #

Article 40-18(Provisions Applicable Mutatis Mutandis) #

Article 41(Objectives and Establishment) #

Article 42(Compulsory Membership) #

Article 43(Rules on Ethical Duties) #

Article 44(Entrustment of Services) #

Article 45(Conciliation of Disputes) #

Article 46(Training of Members) #

Article 47(Supervision) #

Article 48(Disciplinary Actions) #

Article 48-2(Notification and Publication of Measures) #

Article 49 #

Article 50(Restrictions on Services) #

Article 51(Perusal of Relevant Books) #

Article 51-2(Legal Fiction as Public Officials for Purposes of Applying Penalty Provisions) #

Article 52(Entrustment of Business Affairs) #

Article 52-2(Imposition of Penalty Surcharges) #

Article 52-3(Special Cases concerning Filing of Objections) #

Article 52-4(Extension of Period for Paying Penalty Surcharge and Payment of Penalty Surcharge in Installments) #