A penalty surcharge of 78.89 billion won was imposed
The Securities and Futures Committee of the Financial Services Commission announced on the 17th that it has decided to take a penalty of 7.78 billion won and a two-year auditor designation for Korean Aerospace for preparing and disclosing financial statements in violation of accounting standards.
It is explained that earnings were inflated by holding excessively high sales and underestimating the cost of sales for the past 2011-2017. First, the advance payments paid to business partners were regarded as material costs regardless of whether the construction was performed or not, and the construction progress was calculated, and the sales and sales costs were not properly assessed.
In addition, the Jeungseon Committee pointed out that Korea Aerospace distorted profits and losses by increasing the construction progress rate by distributing the deliveries at will. In addition, it was judged that there was a problem in recognizing the expense by dividing the total estimated cost into several accounting periods instead of immediately treating the expected loss as an expense. In addition, they pointed out that development costs that were not compensated by the Defense Acquisition Program Administration were immediately impaired and amortized over several periods, resulting in excessively high intangible assets (development costs).
The Samil Accounting Firm, the auditor of Korea Aerospace, was charged a penalty of 396 million won. In addition, the audit work related to Korean aerospace will be restricted for the next two years. The Jeung Seon Committee said, “Although the auditor recognized that the company’s’advanced payment criteria’ construction progress rate may be different from the actual progress rate, it is necessary to prepare a reasonable alternative. I couldn’t,” he explained.
/ Reporter Shim Woo-il [email protected]
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