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Laws of the Republic of Korea |
1
CERTIFIED PUBLIC ACCOUNTANT ACT
Wholly Amended by Act No. 5255, Jan. 13, 1997
Amended by Act No. 5453, Dec. 13, 1997
Act No. 5505, Jan. 13, 1998
Act No. 5815, Feb. 5, 1999
Act No. 6107, Jan. 12, 2000
Act No. 6426, Mar. 28, 2001
Act No. 6994, Dec. 11, 2003
Act No. 7619, Jul. 29, 2005
Act No. 7796, Dec. 29, 2005
Act No. 8863, Feb. 29, 2008
CHAPTER GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to firmly establish the system for certified public accountants so as to contribute to the protection of rights and interests of the citizens, sound management of businesses, and development of the national economy.
Article 2 (Extent of Functions)
Any certified public accountant shall perform services falling under each of the following subparagraphs, at the request of clients:
1. Audits, appraisals, attestations, calculations, reorganizations or sys- tem set-up relating to accounting, or accounting services concerning establishment, etc. of a juristic person;
2. Representation of taxation matters; or
3. Services ancillary to subparagraphs 1 and 2. Article 3 (Qualification)
Any person who has passed the CPA examination shall be admitted as a certified public accountant.
Article 4 (Grounds of Disqualification)
No person who falls under any of the following subparagraphs may be
admitted as a certified public accountant:
1. Any person who is a minor, incompetent or quasi-incompetent;
CERTIFIED PUBLIC ACCOUNTANT ACT
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2. Any person who has been sentenced to imprisonment without prison
labor or to a heavier punishment, and for whom five years have
not
yet elapsed since the completion of execution (including the cases in
which the execution is deemed to have been completed)
or the exemption
from its execution;
3. Any person who has been consigned to a suspended sentence of im-
prisonment without prison labor or heavier punishment and for
whom
two years have not yet elapsed since the date on which the period
of the stay is terminated;
4. Any person who has been consigned to a deferred sentence of imprison-
ment without prison labor or a heavier punishment, and is
under a
grace period;
5. Any person who has been declared bankrupt, and has not been reinstat-
ed; and
6. Any person who has been dismissed or discharged from office by impeach-
ment or disciplinary measures, or who has been expelled
or whose
registration was cancelled by this Act or the Certified Tax Accountant
Act, and for whom five years have not yet elapsed
since such incidents.
CHAPTER EXAMINATION
Article 5 (CPA Examination)
(1) The CPA examination (hereinafter referred to as the "examination")
shall be administered by the Financial Services Commission
and shall be
composed of primary and secondary examinations.
(3) Any person who intends to take the examination shall fall under any
of the following subparagraphs:
1. A person who has earned not less than regular credits in regular sub-
jects at any university or college provided for in each
subparagraph
of Article 2 of the Higher Education Act, or at any lifelong educa-
tional establishment of in-house college style
or distance college style
CERTIFIED PUBLIC ACCOUNTANT ACT
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provided for in Article 21 or 22 of the Lifelong Education Act (herein-
after referred to as "schools");
2. A person who is recognized to have earned not less than regular credits
in regular subjects in accordance with the Act on Recognition
of
Credits, etc.; and
3. A person who is recognized to have earned not less than regular credits
in regular subjects in accordance with the Act on the
Acquisition of
Academic Degrees through Self-Education.
(4) Ways of determining the kinds of subjects and the number of credits
referred to in paragraph (3), standards for recognizing
credits and qual-
ifications for taking the examination shall be prescribed by the
Presidential Decree.
Article 6 (Exemption from Part of Examinations)
(1) Any person who falls under any of the following subparagraphs shall
be exempt from the primary examination: 1. Any public official of Grade or higher or public official in the Senior
Civil Service who has served for not less than three
years in the fields
of business accounting, auditing, or direct tax-related accounting;
2. Any person who has taught accounting for not less than three years
as a full-time lecturer or higher at a university (including
an equiv-
alent educational institute) or as an associate professor or higher at
a junior college (including an equivalent educational
institute);
3. Any person who has served for not less than five years in the field
of accounting as an officer of a particular level or higher
level dete-
mined by the Presidential Decree at a financial institution provided
for in Article 2 of the Banking Act or at an organization
prescribed
by the Presidential Decree;
4. Any military officer of captain or higher who has served for not less
than five years in the fields of finance management or auditing
at a
finance division in military installations; and
CERTIFIED PUBLIC ACCOUNTANT ACT
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5. Any person who is recognized by the Presidential Decree as having
equivalent or higher qualifications to those who are specified
in sub-
paragraphs 1 through 4.
(2) Any person who has passed the primary examination shall be exempt
from the next primary examination.
Article 6-2 (Certified Public Accountant Qualification System Deliber-
ation Committee)
(1) Any Certified Public Accountant Qualification System Deliberation
Committee shall be established under the Financial Services
Commission
to deliberate on the following matters concerning the acquisition of qualifi-
cation for a certified public accountant:
1. Matters concerning the examination of a certified public accountant
such as subjects of the examination;
2. Matters concerning the fixed number of persons to be selected in the
examination; and
3. Other major matters concerning the acquisition of qualification for a
certified public accountant.
(2) Matters necessary for the composition and operation, etc. of the Cer-
tified Public Accountant Qualification System Deliberation
Committee
shall be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6107, Jan. 12, 2000]
CHAPTER REGISTRATION AND COM-
MENCEMENT OF PRACTICE
Article 7 (Registration)
(1) Where any person who is qualified as a certified public accountant
intends to render services under Article 2 (including a case
where any
person intends to become an employee or a staff of an accounting corpora-
tion), he shall apply to the Financial Services
Commission for registration
as a certified public accountant after completing the apprenticeship train-
ing of not less than one
year in accordance with the Presidential Decree:
Provided, That a person who falls under each subparagraph of Article 6
(1) shall
be exempt from such training.
5
by the Presidential Decree.
(3) Application procedures for registration referred to in paragraph (1),
documentation thereto, and other necessary matters shall
be provided
for in the Presidential Decree.
(4) Registration under paragraph (1) may be renewed in accordance with
the Presidential Decree. In this case, a renewal period shall
be not less
than three years.
Article 8 (Refusal of Registration)
(1) Where a person who applies for registration in accordance with Ar-
ticle 7 (1) falls under one of the following subparagraphs,
the Financial
Services Commission shall refuse such registration:
1. Where he falls under any of subparagraphs of Article 4; or
2. Where he fails to undergo the training referred to in Article 7, even
though he is required to do so.
(2) In the event of refusal of registration in accordance with paragraph (1),
the Financial Services Commission shall immediately
give notice with rea-
sons for refusal to the applicant.
Article 9 (Cancellation of Registration)
(1) Where a certified public accountant registered under Article 7 falls
under each of the following subparagraphs, the Financial
Services Com-
mission shall cancel the registration of a certified public accountant:
1. Where he falls under each subparagraph of Article 4;
2. Where he applies for the cancellation of registration;
3. Deleted; or 4. Where he dies.
(2) The provisions of Article 8 (2) shall apply mutatis mutandis to the
case of paragraph (1) 1 and 2.
CHAPTER RIGHTS AND DUTIES
Article 12 (Establishment of Offices)
CERTIFIED PUBLIC ACCOUNTANT ACT
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(1) Any certified public accountant may establish an office so as to carry
out functions referred to in Article 2.
(2) No certified public accountant shall be allowed to have two offices
or more for any reasons.
Article 13 (Clerks)
(1) Any certified public accountant may employ clerks to assist him in
carrying out his functions (hereinafter referred to as "clerks").
(2) Any certified public accountant has a responsibility for instructing
and supervising the clerks.
Article 14 Deleted.
(2) No certified public accountant shall do activities leading to degra-
dation.
(3) No certified public accountant shall intentionally conceal truth in
performing functions and file false reports.
Article 16 (Compliance with Bylaws)
Any certified public accountant shall comply with bylaws of the Korean
Institute of Certified Public Accountants.
Article 17 Deleted.
Any certified public accountant shall draw up books relating to his func-
tions and keep them in his office.
Article 19 (Guarantee for Liabilities of Damage)
Where a certified public accountant (excluding certified public accounts
belonging to certified public accountants corporations)
causes, on purpose
or by negligence, losses to his clients (including a bona fide third person
in the case of carrying out functions
referred to in subparagraph 1 of Ar-
ticle 2) while carrying out his functions, he shall take necessary mea-
sures so as to cover
liability for compensation for clients, such as sub-
scription for mutual-aid association administered by the Korean Institute
of Certified Public Accountants in accordance with its bylaws or pur-
chase of insurance, etc. as prescribed by the Presidential
Decree.
Article 20 (Duties of Confidentiality)
No certified public accountant or his clerks, or no former certified public
CERTIFIED PUBLIC ACCOUNTANT ACT
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accountant or his clerks shall disclose confidential information which
was obtained in the course of performing his functions: Provided,
That
if there are contrary provisions in other Acts and subordinate statutes,
this provision shall not apply.
Article 21 (Restrictions on Functions)
(1) No certified public accountant shall be allowed to carry out func-
tions relating to auditing or certifying financial statements
(including
consolidated financial statements provided for in Article 1-2 of the Act
on External Audit of Stock Companies; hereinafter
the same shall apply)
for persons falling under one of the following subparagraphs: 1. Any person (including any company; hereafter the same shall apply
in this Article) for whom a certified public accountant or his
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. Any person who employs certified public accountants or their spouses
or has employed them during the preceeding one year; or
3. Any person, other than those provided for in subparagraphs 1 and
2, who is recognized by the Presidential Decree as having obvious
interests with a certified public accountant or his spouse so as to make
it difficult for the certified public accountant to carry
out his functions
fairly.
(2) Any certified public accountant, who is contracted to perform the
business of auditing or certifying the financial statement
of any specific
company, shall be prohibited from performing the business falling under
each of the following subparagraphs for
such specific company during the
contract term: 1. The business of making accounting records and compiling financial
statement;
2. The business of conducting internal audit by proxy;
3. The business of creating or operating the financial information sys-
tem; and
4. Other businesses that are prescribed by the Presidential Decree as
having conflict with the business of auditing or certifying
the financial
statement.
CERTIFIED PUBLIC ACCOUNTANT ACT
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(3) The certified public accountant referred to in paragraph (2) may per-
form any business other than the business falling under
each subpara-
graph of the same paragraph in accordance with the procedures prescribed
by the Presidential Decree including internal
control procedures, etc.
Article 22 (Prohibition on Lease of Name or Title)
(1) No certified public accountant shall be allowed to let other persons
carry
out functions provided for in Article 2 under his name or business
name, nor shall lease his registration certificate.
(2) No certified
public accountant may acquire rights in dispute.
(3) In the event of performance of functions under Article 2, no certified
public
accountant may receive, ask for, or agree on money or other ben-
efits in exchange for illegal favors, or participate in conspiracy
or con-
sultation with his clients so that they can earn unjustifiable monetary
interests by fraud or other illegal ways.
CHAPTER ACCOUNTING CORPORATION
Article 23 (Establishment)
(1) Any certified public accountant may establish an accounting corpo-
ration in order to systematically and professionally render
the services
under Article 2.
(2) Matters falling under each of the following subparagraphs shall be
entered in the articles of incorporation of any accounting
corporation:
1. Objective;
2. Name;
3. Location of principal office and branch office;
4. Names of employees and directors including their resident registra-
tion numbers and domiciles;
5. Per share amount;
6. The number of shares of each employee;
7. Total amount of capital;
8. Matters concerning how to make up for losses;
9. Matters concerning the general meeting of employees;
CERTIFIED PUBLIC ACCOUNTANT ACT
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10. Matters concerning the representative director;
11. Matters concerning services; and
12. Time and grounds when the duration or the grounds of dissolution is
each prescribed.
Article 24 (Registration of Accounting Corporation)
(1) Any accounting corporation shall, when it intends to offer services
under
Article 2, file a registration thereof with the Financial Services
Commission under the conditions as prescribed by the Presidential
Decree.
(2) Any accounting corporation intending to file the registration under
paragraph (1) shall satisfy requirements falling under each
of the fol-
lowing subparagraphs:
1. It is required to be in conformity with the provisions of Articles 26
and 27 (1);
2. Contents of registration-application documents are required not to
be in violation of this Act or orders given under this Act;
and
3. Registration-application documents are required not to contain any
false entry.
(3) In the event that any person who files a registration is found not
to satisfy the requirements referred to in paragraph (2),
the Financial
Services Commission may deny such registration. If the registration- appli-
cation documents are found to be imperfect,
the Financial Services
Commission may ask the applicant to supplement such documents for a
fixed period.
(1) Any accounting corporation shall have not less than 3 directors who
are certified public accountants: Provided, That a person
falling under
one of the following subparagraphs shall not be a director: 1. Any person who is not a member of the accounting corporation;
2. Any person who has been subject to a disposition taken to suspend
his business (including a disposition taken to suspend part
of his busi-
CERTIFIED PUBLIC ACCOUNTANT ACT
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ness) under Article 48 and for whom the business suspension period
has yet to expire; and
3. Any person who used to be a director of an accounting corporation
whose registration has been cancelled or whose practice has
sus-
pended under Article 39 (1) (limited to a person who was a director
at the time of occurrences of reasons for cancellation
or suspension),
but has not spent three years after the cancellation or has not com-
pleted the suspension period.
(2) An accounting corporation shall have not less than 10 certified pub-
lic accountants from among its directors and employees.
(3) The certified public accountants described in paragraph (2), who are
not directors (hereinafter referred to as "member accountants")
shall not
fall under paragraph (1) 2.
(4) Every accounting corporation shall have one representative director
as prescribed in Ordinance of the Prime Minister.
(5) Every employee of any accounting corporation shall be the certified
public account and the number of employees shall be not
less than 3.
Article 27 (Capital, etc.)
(1) The capital of an accounting corporation shall be not less than 500
million won.
(3) In the event of gifts under paragraph (2), they shall be added up
as a special profit.
(4) The Financial Services Commission may order an accounting corpora-
tion to make up for deficits or to increase capital for a
fixed period if
the accounting corporation fails to make up for deficits or increase cap-
ital in accordance with paragraph (2).
Article 28 (Reserves for Damage Compensation)
CERTIFIED PUBLIC ACCOUNTANT ACT
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(1) Every accounting corporation shall make the reserve for damage com-
pensation in every business year in accordance with the
Presidential
Decree so as to cover liability to compensate losses (including liability
to compensate losses under Article 17 of
the Act on External Audit of
Stock Companies) caused to the clients (including a bona fide third person
in the cases of carrying
out functions under subparagraph 1 of Article
2) while performing functions under Article 2.
(2) The reserve for damage compensation under paragraph (1) shall not
be used for other purposes than compensation, unless the Financial
Services Commission approves otherwise.
Article 29 (Restrictions, etc. on Contributions in Other Corporations)
(1) No accounting corporation may contribute in other corporations
or pro-
vide guarantees for obligations of others in excess of the amount com-
puted by multiplying its own equity capital by such
rates as prescribed
by the Presidential Decree.
(2) The own equity capital referred to in paragraph (1) shall mean the
sum of money computed by deducting total deficit (excluding
the reserve
for damage compensation) from total assets in balance sheet at the end
of the preceding business year.
Article 30 (Settlement of Accounts, etc.)
(1) Except as otherwise prescribed by this Act, every accounting corpo-
ration shall settle accounts on the basis of accounting
standards set forth
in Article 13 of the Act on External Audit of Stock Companies.
(2) Every accounting corporation shall prepare a financial statement in
accordance with subparagraph 1 of Article 1-2 of the Act
on External
Audit of Stock Companies and submit it to the Financial Services
Commission within three months after the end of each
business year.
(3) The Financial Services Commission may, where it is deemed necessary,
inspect whether or not such financial statements as referred
to in para-
graph (2) are reliably formulated.
Article 31 (Name)
CERTIFIED PUBLIC ACCOUNTANT ACT
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(1) Any accounting corporation shall use the words of "accounting corpo-
ration" in its name.
(2) Any person other than an accounting corporation shall not be allowed
to use the words of "accounting corporation" or similar.
Article 32 (Offices)
(1) An accounting corporation may have regional offices besides a main
office under the conditions as prescribed by the Presidential
Decree.
(2) No director or member accountant of an accounting corporation may
have an office other than the accounting corporation
to which he belongs.
Article 33 (Restrictions on Functions)
(1) An accounting corporation may not perform functions of auditing and
certifying financial statements for a person falling under
any of the fol-
lowing subparagraphs:
1. Any person (including any company; hereafter the same shall apply
in this Article) of which shares are owned, or for which contributions
are made by the accounting corporation;
2. Any person with whom members of the accounting corporation have
relations provided for in each subparagraph of Article 21 (1);
and
3. Any person who is undeniably interested in any accounting corpo-
ration other than the accounting corporations referred to subparagraphs
1 and 2 or is prescribed by the Presidential Decree as being recognized
to have been interested in such accounting corporation
during the pre-
ceeding one year.
(2) The provisions of Article 21 (2) and (3) shall apply mutatis mutandis
to every accounting corporation.
(1) No accounting corporation shall have any person other than its di-
rectors render services of auditing and certifying the accounting:
Provided,
That this shall not apply to the case where its member accountants may
be involved as assistants to the accounting corporation.
(2) Where an accounting corporation audits or certifies financial state-
ments, its representative director referred to in Article
26 (4) shall in-
dicate the name of his accounting corporation, sign his name and put his
seal upon the relevant documents.
Article 35 (Prohibition of Competitive Practices)
No director or member accountant of an accounting corporation may ren-
CERTIFIED
PUBLIC ACCOUNTANT ACT
13
der services falling under the extent of services of the accounting corpo-
ration for himself or for a third person, and may be
employed as a director
or member accountant of other accounting corporations.
Article 36 (Withdrawal)
Any member shall be considered to have been automatically withdrawn
for reasons specified in each of the following subparagraphs:
1. Where his registration has been canceled under Article 9;
2. Where he falls under Article 26 (1) 2;
3. Where grounds provided for in articles of incorporation have taken
place; or
4. Where there happens a resolution by the general meetings of members.
Article 37 (Dissolution)
(1) An accounting corporation shall be dissolved for each of the following
reasons: 1. Occurrence of events provided for in articles of incorporation;
2. Resolution by the general meetings of members;
3. Merger;
4. Cancellation of registration;
5. Insolvency; or
6. Order or judgment of court.
(2) In the event that the grounds of paragraph (1) 1 through 3 occur,
the accounting corporation
shall notify the Financial Services Commission
of the fact.
(4) Matters necessary for the management or operation of deposits re-
ferred to in paragraph (3) shall be set out by the Presidential
Decree.
Article 38 (Report on Change in Articles of Incorporation)
In the event that changes are made with respect to the matters
of subpara-
graphs 1, 7 (limited to a case where the capital decreases) and 11 from
among entries of the articles of incorporation
as prescribed in Article 23
(2), any accounting corporation shall promptly file a report thereon with
the Financial Services Commission.
14
Article 39 (Cancellation of Registration, etc.)
(1) Where an accounting corporation falls under each of the following
subparagraphs, the Financial Services Commission may cancel
its regis-
tration or may suspend services, in whole or in part, with fixing a period
within one year: Provided, That in the case
of subparagraphs 1 through
3, such registration shall be canceled:
1. Where an accounting corporation which does not meet requirements
specified in Article 26 (1), (2), or 27 (1) fails to supplement
such
requirements within three months;
2. Where an accounting corporation has made a registration under Ar-
ticle 24 (1) in a false or unlawful manner;
3. Where an accounting corporation has rendered the services in viola-
tion of the suspension order;
4. Where an accounting corporation has violated the provisions of Article
26 (4), 27 (2), 28, 29, 30 (1) or (2), 31 (1), 33, 34 or
38 (including
the provisions of Article 15 (1) and (3), 16, 18, 20 or 22 that are
applied mutatis mutandis in the provisions of
Article 40);
5. Where an accounting corporation has made gross mistakes or omissions
in auditing or certification; or
6. Where an accounting corporation has violated this Act or order made
under this Act.
(2) Deleted.
Article 39-2 (Hearing)
Where the Financial Services Commission intends to cancel the registra-
tion of an accounting corporation under Article 39, it shall
hold a hearing.
(1) The provisions of Articles 13, 15 (1) and (3), 16, 18, 20, 22 and
48 (4) shall apply mutatis mutandis to any accounting corporation
unless
they are contradictory to the nature thereof.
(2) With respect of matters concerning accounting corporations other than
those specified in this Act, the provisions relating to
limited partnerships
of the Commercial Act shall apply mutatis mutandis.
CERTIFIED PUBLIC ACCOUNTANT ACT
15
CHAPTER KOREAN INSTITUTE OF
CERTIFIED PUBLIC
ACCOUNTANTS
Article 41 (Purpose and Establishment)
(1) The Korean Institute of Certified Public Accountants (hereinafter re-
ferred to as the "Institute") shall be established to
heighten morality,
improve or develop functions of certified public accountants, and instruct
or supervise its members.
(2) The Institute shall be a juristic person.
(3) The Institute shall prepare bylaws and shall be established with the
approval by the Financial Services Commission, pursuant
to the Presiden-
tial Decree.
Any certified public accountant who is registered under Article 7 (1) or
any accounting corporation that is registered under Article
24 (1) shall
enter into the Institute.
(1) The Institute shall make rules and regulations relating to professional
ethics which members shall observe while performing
their functions.
(2) Members shall comply with rules and regulations on professional
ethics.
Article 44 (Entrustment, etc. of Services)
(1) Public institutions may entrust matters which fall under the func-
tions of certified public accountant under Article 2 to the
Institute or make
a request for consultation with it.
(2) Where the Institute is entrusted with services or requested for consulta-
tion in accordance with paragraph (1), it may have
members carry out
such services or consultation.
(3) The Institute may, if necessary, make a recommendation for improve-
CERTIFIED PUBLIC ACCOUNTANT ACT
16
ment to the entrusting or requesting institution under paragraph (1).
Article 45 (Conciliation of Disputes)
(1) The Institute shall, upon the request of disputing parties, afford con-
ciliation of disputes arising from functions between
certified public account-
ants (including accounting corporations; hereafter the same shall apply
in this Article), or between
a certified public accountant and his client
(including a bona fide third person under Articles 19 and 28 (1)).
(2) A conciliation
committee shall be established in the Institute to re-
solve disputes referred to in paragraph (1).
(3) The composition or operation of the conciliation commission described
in paragraph (2), or other necessary matters shall be
prescribed in the
Presidential Decree.
Article 46 (Training, etc. of Members)
(1) The Institute shall provide training to a person falling under any of
the following subparagraphs and instruct or supervise
a voluntary train-
ing program of members:
1. Members;
2. Any person who intends to register as a certified public accountant
in accordance with Article 7; or
3. Clerks, etc. described in Article 13.
(2) The Institute shall have an accounting training center to perform
the training pursuant
to paragraph (1).
(3) The Institute shall determine matters necessary for training and
supervising pursuant to paragraph (1), with the approval of
the Financial
Services Commission.
Article 47 (Supervision)
(1) The Institute shall be under the supervision of the Financial Services
Commission.
(3) Public officials who conduct examinations, pursuant to paragraph (2),
shall show credentials indicating his authority to relevant
persons.
CERTIFIED PUBLIC ACCOUNTANT ACT
17
CHAPTER DISCIPLINARY ACTION
Article 48 (Disciplinary Action)
(1) Where a certified public accountant falls under any of the following
subparagraphs, the Financial Services Commission may take
a disciplinary
action against him as prescribed in paragraph (2) in accordance with a
resolutions of the Certified Public Accountants
Disciplinary Committee:
1. Where he violates this Act or order made under this Act;
2. Where he makes gross mistakes or omissions in audit and certification;
3. Where he violates the bylaws of the Institute; or
4. Where he causes damage to the integrity of certified public accountants
regardless of accountant's functions or other functions.
(2) Types of disciplinary action against certified public accountant shall
be as follows:
1. Cancellation of registration;
2. Suspension of practicing for two years or less;
3. Suspension of part of practicing for one year or less; or
4. Reprimand.
(3) The Institute may, where it recognizes the existence of the grounds
for taking a disciplinary action falling under
each subparagraph of par-
agraph (1) against a certified public accountant (including any certified
public accountant affiliated
with any accounting corporation; hereafter
the same shall apply in this Article) who is its member, file a request,
accompanied
by evidential documents, with the Financial Services Com-
mission for taking such disciplinary action.
(4) The disciplinary action under paragraph (1) shall not be taken after
three years have elapsed from the date of occurrence of
reasons provided
for in each subparagraph of paragraph (1).
(5) Matters relating to the Certified Public Accountants Disciplinary
Committee shall be set out in the Presidential Decree.
Article
49 Deleted.
Article 50 (Restrictions on Services)
CERTIFIED PUBLIC ACCOUNTANT ACT
18
Any person other than certified public accountants who have been reg-
istered under Articles 7 or accounting corporations which
have been reg-
istered under Article 24 shall be prohibited from rendering the services
as prescribed in Article 2 except as otherwise
provided for in other Acts.
Article 51 (Perusal of Relevant Books, etc.)
Any certified public accountant or accounting corporation may, where it
is deemed necessary for the performance of functions, apply
for the perusal
of relevant books and documents to the institutions concerned, and the in-
stitution to which an application is
made shall not refuse the applica-
tion without any justifiable ground.
Article 52 (Delegation or Entrustment of Affairs)
(1) Deleted.
(2) The Financial Services Commission may entrust the affairs provided
for in Articles 7 through 9, 30 (2) and 48 (1), in whole
or in part, to
the Institute under the conditions as prescribed by the Presidential Decree.
In this case where the Financial Services
Commission entrusts its duties
pursuant to Article 48 (1), it may designate a resolution body in substitu-
tion of the Certified
Public Accountants Disciplinary Committee and entrust
the duties to such resolution body.
LECTION OF PENALTY
SURCHARGE
Article 52-2 (Imposition of Penalty Surcharge)
CERTIFIED PUBLIC ACCOUNTANT ACT
19
(1) In the event 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 pubic accountant affil-
iated with the accounting corporation) after it
or he 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 ac-
counting corporation and a penalty surcharge not exceeding 100 million
won on such certified public accountant, respectively in lieu of the sus-
pension of the services or the functions.
(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:
1. Nature and extent of the act of violation;
2. Term and frequency of the act of violation; and
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 corpo-
ration newly incorporated by such merger, on and from which the Financial
Services Commission may impose and collect
a penalty surcharge.
(4) Necessary matters concerning standards for imposing the penalty sur-
charge, etc. under the provisions of paragraphs (1) through
(3) shall be
prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
Article 52-3 (Raising of Objection)
(1) Any person who is dissatisfied with a disposition taken to impose a
penalty surcharge on him under Article 52-2 may raise an
objection to
the Financial Services Commission, citing the reasons therefor, within
30 days from the date on which he is notified
of such disposition.
(2) The Financial Services Commission shall make a decision with re-
spect to an objection raised under paragraph (1) within 30
days from the
date on which such objection is raised: Provided, That in the event that
CERTIFIED PUBLIC ACCOUNTANT ACT
20
the Financial Services Commission is unable to make such decision within
the period of 30 days, it may extend such period within
the scope of 30
days.
(3) Any person who is dissatisfied with a decision made under para-
graph (2) may seek an administrative abjudication thereon.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
Article 52-4 (Extension of Period for Paying Penalty Surcharge and
Pay-
ment of Penalty Surcharge in Installments)
(1) In the event that any person on which a penalty surcharge is imposed
(hereinafter referred to as "person liable for paying the
penalty surcharge")
is deemed difficult to pay the entire amount of such penalty surcharge
in full on the grounds falling under
each of the following subparagraphs,
the Financial Services Commission may extend the payment period thereof
or allow him to pay
such penalty surcharge in installments. In this case,
the Financial Services Commission may, when it is deemed necessary,
have
him furnish a security: 1. Where he suffers substantial damage on his property due to a nat-
ural disaster, etc.;
2. Where he is expected to face substantial difficulties in his financial sit-
uation due to his payment of the penalty surcharge
in a lump sum;
and
3. Where other grounds corresponding to subparagraphs 1 or 2 exist.
(2) In the event that the person liable for paying the penalty
surcharge
intends to get the time limit for paying his penalty surcharge extended
or his penalty surcharge paid in installments
under paragraph (1), he
shall file an application therefor with the Financial Services Commission
by 10 days before the expiration
of the time limit for paying his pen-
alty surcharge. 1. When he fails to pay his penalty surcharge, the payment of which has
been decided to be made in installments, within the payment
time
limit;
CERTIFIED PUBLIC ACCOUNTANT ACT
21
2. When he changes his security or fails to execute orders given by the
Financial Services Commission, which are necessary to preserve
such
security;
3. When it is deemed impossible to collect his penalty surcharge, inwhole
or in part, on the grounds that he is subjected to the
commencement
of compulsory execution, the commencement of an auction, the declation
of bankruptcy, the dissolution of a corporation
or a disposition taken
to collect national or local taxes in arrears, etc.; and
4. Other grounds corresponding to subparagraphs 1 through 3 exist.
(4) Necessary matters concerning the extension of the time limit
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 the Presidential Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
Article 52-5 (Collection of Penalty Surcharge and Disposition Taken
to
Collect Penalty Surcharge in Arrears)
(1) In the event that any person liable for paying the penalty surcharge
fails to pay such penalty surcharge within the payment
time limit, the
Financial Services Commission may collect additional dues prescribed by
the Presidential Decree from him for a
period ranging from the date following
the payment time limit to the date preceding the date on which the penalty
surcharge in
question is paid.
(4) Necessary matters concerning procedures for collecting penalty sur-
charge and taking a disposition to collect penalty surcharge
in arrear
under paragraphs (1) through (3) shall be prescribed by the Presidential
Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
CERTIFIED PUBLIC ACCOUNTANT ACT
22
CHAPTER PENAL PROVISIONS
Article 53 (Penal Provisions)
(1) In the case of violation of Article 22 (3) or 28 (2), a certified public
accountant (including directors or member accountants
of an account-
ing corporation: hereafter the same shall apply in this Article) shall be
punished by imprisonment for not more
than five years, or by a fine not
exceeding 50 million won.
(2) In the case of violation of Article 15 (3) or 20 (including the cases
in which the provisions of Article 40 apply mutatis mutandis),
a certi-
fied public accountant shall be punished by imprisonment for not more
than three years or by a fine not exceeding 10 million
won.
(3) Any certified public accountant, who commits activities specified in
each of the following subparagraphs, shall be punished
by imprisonment
for not more than one year, or by a fine not exceeding 5 million won:
1. Where he performs his business in violation of Article 21 (1) and (2)
(including the case where the provisions are applied mutatis
mutandis
under Article 33 (2)) or Article 33 (1);
2. Where he leases his name or title in contravention of Article 22 (1)
(including the cases in which the provisions of Article 40
apply mu-
tatis mutandis); or
3. Where a person against whom disciplinary orders for suspension of
practicing have been made in accordance with Article 48 performs
functions specified in Article 2 during the suspension period of prac-
ticing.
(4) In the event that any accounting corporation fails to deposit an
amount equivalent to the reserve for damage compensation in
violation
of Article 37 (3), the chief director of such accounting corporation shall
be punished by imprisonment with prison labor
for not more than one
year or by a fine not exceeding 5 million won.
(5) Any person qualified as a certified public accountant or a certified
public accountant, where he performs functions specified
in Article 2
without having registered or having his registration renewed, as described
in Article 7 (1) and (4), shall be punished
by a fine not exceeding 5 million
CERTIFIED PUBLIC ACCOUNTANT ACT
23
won.
(6) Any certified public accountant, who commits activities specified in
each of the following subparagraphs, shall be punished
by a fine not ex-
ceeding 3 million won:
1. Where he establishes two offices or more;
2. Where he fails to make books or to keep them in his office in accor-
dance with Article 18 (including the cases in which the provisions
of
Article 40 apply mutatis mutandis);
3. Where he acquires disputing rights in contravention of Article 22 (2)
(including the cases in which the provisions of Article
40 apply mu-
tatis mutandis); or
4. Where he fails to comply with the prohibition of competitive practices
provided for in Article 35.
Article 54 (Penal Provisions)
(1) In the case of violation of Article 50, a person who is not a certified
public accountant and has performed duties shall be
punished by im-
prisonment for not more than three years, or by a fine not exceeding 20
million won.
(2) Any person who is not a certified public accountant shall be pun-
ished by imprisonment for not more than one year, or by a
fine not ex-
ceeding 5 million won, where he commits activities falling under any of
the following subparagraphs:
1. Where he uses the words of certified public accountant, accounting
corporation, or similar name;
2. Where he publicizes the whole or part of financial documents, without
audit or certification of a certified public accountant
or accounting
corporation, to the effect that a certified public accountant or an ac-
counting corporation has audited or certified
such documents; or
3. Where he discloses confidential information obtained while assisting
in the functions of certified public accountant.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on March 1, 1997.
Article 2 (Transitional Measures relating to CPA Examinations)
CERTIFIED PUBLIC
ACCOUNTANT ACT
24
(1) Any person who passed the first examination administered in 1996
shall be deemed to have passed the first examination provided
for in this
Act.
(2) Matters related to the recognition of qualification or training of cer-
tified public accountant, etc. for a person who passed
the second exam-
ination administered prior to 1988, shall be prescribed by the Presidential
Decree.
Article 3 (Transitional Measures relating to Qualification for Certified
Public Accountant)
(1) At the time when this Act enters into force, a person who is qual-
ified as a certified public accountant by the previous provisions,
shall be
deemed to have been qualified as a certified public accountant pursuant
to this Act.
(2) At the time when this Act enters into force, training under the pre-
vious provisions shall be deemed to be such under this
Act.
Article 4 (Transitional Measures relating to Registration, Approval,
Filing of Reports, etc.)
At the time when this Act enters into force, filings of reports on registra-
tion of a certified public accountant and cancellation
thereof, opening,
suspension, and cessation of businesses, and relocation of offices pur-
suant to the previous provisions of this
Act shall be deemed to have been
made in accordance with this Act.
Article 5 (Transitional Measures relating to Establishment, etc. of Ac-
counting Corporation)
(1) At the time when this Act enters into force, an accounting corpora-
tion shall be deemed to be such by the previous provisions,
until it satisfies
requirements set forth in the amended provisions of Articles 24 through
26, and 27 (1): Provided, That an accounting
corporation at the time
of implementation of this Act fails to satisfy requirements set forth in
Articles 24 through 26 and 27
(1), by December 31, 1997, its estab-
lishment approval shall be canceled.
(2) With respect of services rendered by an accounting corporation exist-
ing at the time of implementation of this Act before the
enforcement date
of this Act or before it satisfies requirements set forth in the amended
provisions of Articles 24 through 26
and 27 (1), the previous provisions
of Article 12-17 shall apply.
CERTIFIED PUBLIC ACCOUNTANT ACT
25
(3) Where an accounting corporation is to be established on December
31, 1997 after this Act takes effect, it may be established
with the total
number of directors and member accountants not exceeding 10 people
and capital of not less than 500 million won.
Article 6 (Transitional Measures relating to Members)
(1) At the time when this Act enters into force, members of an account-
ing
corporation shall be deemed to be its directors under this Act.
(2) At the time when this Act enters into force, a person who is
or used
to be a member of an accounting corporation shall be deemed to be its
director under this Act, with regard to the application
of the amended
provisions of Article 26 (1) 3.
Article 7 (Transitional Measures relating to Joint Accounting Office)
(1) Any joint accounting office which was registered prior
to the entry
into force of this Act shall be deemed to have its registration canceled
on December 31, 1997.
(2) At the time when this Act enters into force, a joint accounting office
under the previous provisions, may perform functions
entrusted prior to
the entry into force of this Act in its name or title of joint accounting
office: Provided, That functions under
Article 2 shall not be newly en-
trusted after the entry into force of this Act.
Article 8 (Transitional Measures relating to Association)
At the time when this Act enters into force, the Certified Public Accoun-
tants Association, under the previous provisions, shall be deemed to be
the Korean Institute of Certified Public Accountants in
accordance with
this Act.
Article 9 (Transitional Measures relating to Application of Penal Pro-
visions)
In the case of application of penal provisions with regard to activities
prior to the entry into force of this Act, the previous
provisions shall
apply.
Article 10 (Relation with Other Acts and Subordinate Statutes)
At the time when this Act enters into force, references to the previous
Certified Public Accountant Act or previous provisions thereof in other
Acts and subordinate statutes where there are relevant
provisions in this
Act, shall be construed to include either this Act or such relevant provi-
sions of this Act as replacing the
previous provisions.
CERTIFIED PUBLIC ACCOUNTANT ACT
26
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998.
(Proviso Omitted.)
(2) (Transitional Measures relating to Dispositions) At the time of the en-
try into force of this Act, authorization or other actions
taken by adminis-
trative agencies, or various reports or other actions submitted to admin-
istrative agencies under the previous
provisions, shall be deemed to be
actions taken by or submitted to administrative agencies under this Act.
(3) through (5) Omitted.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on the date of its
promulgation. (Proviso Omitted.)
(2) (Transitional Measures on Penal Provisions) In applying the penal pro-
visions to acts committed prior to the entry into force
of this Act, the pre-
vious provisions shall apply.
ADDENDUM
This Act shall enter into force on April 1, 2000: Provided, That the amended
provisions of the proviso of Article 5 (3) of the Addenda
of the Amendment
to the Certified Public Accountant Act (Act No. 5255) shall enter into force
on the date of its promulgation.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2001: Provided, That the
amended provisons of Articles 10, 17 and 38, and the amended
provi-
sions of the Addenda of the Certified Public Accountants Act (Act No.
5255) shall enter into force on the date of its promulgation.
CERTIFIED PUBLIC ACCOUNTANT ACT
27
Article 2 (Application Example concerning Grounds of Disqualification)
In the event that any person falls under the grounds of disqualification
under the amended provisions of Article 4 due to the grounds that ac-
crued prior to the enforcement of this Act, he shall be governed
by the
previous provisions notwithstanding the amended provisions of the same
Article.
Article 3 (Transitional Measures concerning Previous Accounting Cor-
poration)
Any accounting corporation that is set up upon the authorization of the
Minister of Finance and Economy under the previous provisions
at the
time when this Act enters into force shall be deemed registered under
the amended provisions of Article 24 (1).
Article 4 (Transitional Measures concerning Application of Penal Pro-
visions)
The application of the penal provisions to any act committed prior to the
enforcement of this Act shall be governed by the previous
provisions.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force on the date of its
promulgation: Provided, That the amended provisions of
Article 21 (1)
shall enter into force on January 1, 2004 and the amended provisions of
Article 5 (3) through (5) shall enter into
force on January 1, 2007, respec-
tively.
(2) (Application Example concerning Disposition Taken to Suspend Part of
Business of Certified Public Accountant) The amended provisions
of Article
26 (1) 2 shall apply, starting with the case where any certificated public
accountant is subject to a disposition taken
to suspend part of his busi-
ness after the enforcement of this Act.
ADDENDA
(1) (Enforcement Date) This Act shall enter into force three months after
the date of its promulgation.
(2) (Application Examples regarding Cancellation, etc. of Registration of
Accounting Corporation) The amended provisions of Article
40 (1) shall
apply starting with the portion of the causes, such as the cancellation of
registration, occurring for the first time
after the enforcement of this Act.
CERTIFIED PUBLIC ACCOUNTANT ACT
28
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2006
Articles 2 through 6 Omitted.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
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