chapter  2
Transparency at the crossroads
Contemporary accountancy in Korea
ByJay Junghun Lee, Han Yi
Pages 18

This chapter offers some insights into the conflicting scene by describing the current landscape of accountancy in Korea. The chapter describes the history of economic development and accounting/auditing standard changes in Korea. It summarizes the key institutional features of Korean accounting practices after the adoption of the International Financial Reporting Standards (IFRS) in 2011. The chapter also describes the recent accounting scandal of Daewoo Shipbuilding & Marine Engineering to illustrate how and why the adoption of the IFRS does not necessarily improve accounting transparency in Korea. The audit committee (AC) was introduced in 1999 by the Commercial Law after both the IMF and the World Bank requested that Korea secure accounting transparency at the firm level as a condition of the bailout. Daewoo Shipbuilding & Marine Engineering (DSME), which, along with Hyundai Heavy Industries and Samsung Heavy Industries, was one of Korea's top three shipbuilders, reported losses of about three billion US dollars in the second quarter of 2015.