April 16, 2024

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[THE INVESTOR] South Korea‘s financial regulator on March 24 ordered accounting firm Deloitte Anjin to suspend conducting new audits for one year as punishment for “systematically ordering and turning a blind eye” to accounting fraud by the troubled Daewoo Shipbuilding & Marine Engineering.

The punishment was announced after a meeting of the Securities and Futures Commission, a regulatory body under the Financial Services Commission, earlier in the day. 

Deloitte Anjin, one of the nation’s big three accounting firms, will be banned from offering new accounting services to listed firms that have used the auditor’s service for at least three years, companies whose auditor has already been designated by the SFC and financial institutions.

The firm was also ordered to pay 1.6 billion won (US$1.43 million) for falsifying a stock-related document and will be barred from conducting an audit on DSME for five years.

Starting in late 2015, the financial regulator had conducted a near one-year investigation into Deloitte Anjin over its failure to uncover measures taken by Daewoo Shipbuilding to cook its books so as to make its snowballing losses in 2013 and 2014 look smaller.

By Alex Lee and newswires (alexlee@heraldcorp.com)