A foreign company seeking to list its shares on KRX must appoint an accounting firm that would serve as external auditor. For a successful IPO, the accounting firm is supposed to implement the following roles.

Qualification for Independent Auditors

A foreign company may freely appoint a Korean or foreign accounting firm. Nevertheless, KRX imposes the following requirements for qualification of independent auditors in an effort to ensure accounting transparency and investor protection.

Qualification Requirements for Independent Auditor
  • Korean accounting firm
    Korean accounting firm
    Trading History At least 5 years since incorporation.
    Number of professionals At least 50 CPAs
    Revenue At least 10 billion KRW for the recent fiscal year
    Indemnity reserve At least the total of 2 billion KRW for compensatory damage reserve and the mutual indemnity fund
    International association Having a contract for maintenance of audit quality with an accounting firm having at least 30 member firms worldwide and employing at least 2,000 professionals
    Penalties imposed by the financial authority No disciplinary measures from regulator such as cancellation of registration or suspension of the whole or part of its operations for the last three years
  • Foreign accounting firm for Initial Public Offering on KRX
    Foreign accounting firm for Initial Public Offering on KRX
    Trading History At least 5 years since incorporation.
    Number of professionals At least 50 CPAs
    Revenue At least 10 billion KRW for the recent fiscal year
    Indemnity reserve At least the total of 2 billion KRW for compensatory damage reserve and the mutual indemnity fund
    International association Having a contract for maintenance of audit quality with an accounting firm having at least 30 member firms worldwide and employing at least 2,000 professionals
    Penalties imposed by the financial authority No disciplinary measures from regulator such as cancellation of registration or suspension of the whole or part of its operations for the last three years
  • Foreign accounting firm for Secondary Public Offering on KRX
    Foreign accounting firm for Secondary Public Offering on KRX
    Trading History Same as the IPO on KRX
    Number of professionals
    Revenue
    International association Having at least 30 member firms worldwide and employing at least 2,000 professionals or having a contract for maintenance of audit quality with that accounting firm