Woori Financial Group won the honor at the 9th Korea Accounting Awards hosted by Maekyung Media. Woori Finance won the grand prize after being evaluated as having made efforts to improve audit quality by upgrading the group’s internal accounting management system that encompasses domestic and foreign corporations and increasing audit time and resource input even after the designated audit was completed.
Woori Finance has established an internal accounting management system for the group that encompasses holding companies and all domestic subsidiaries and expanded its management scope to overseas subsidiaries. It is a method of continuously checking the financial reporting risks and core controls of each company, and also checking the accounting processing and internal control operations of local overseas subsidiaries. Core controls for internal accounting increased 34% over the past three years from 4,051 cases in 2022 when the designated audit ended to 5,433 cases last year.
There is also a system to preemptively respond to complex accounting issues unique to financial holdings. Woori Finance has signed a regular advisory contract with a large accounting firm to review complex financial products, new transactions, and major accounting in advance. Important accounting judgments and disclosures are discussed with external auditors in advance to reduce disagreements that may arise during the audit process.
◆ Increase audit resources even after the designated audit is over
In particular, Woori Financial Group is the only one of the four major financial holding companies that has increased its external audit contract time since the end of the designated audit. Compared to the last business year of the designated audit and the recent free-commission business year, it increased by 629 hours.
Last year, the audit fee was increased from 1.037 billion won to 1.83 billion won as accounting complexity increased due to the review of the acquisition of insurance companies. The scheduled audit time was also extended from 9,930 hours to 17,029 hours. It has increased audit resources that are put into major accounting risk areas such as complex financial products and consolidated settlement, overseas corporations, and internal accounting management systems.
The number of audit committee members has increased from three before 2022 to five now. The audit committee meets regularly and occasionally with external auditors to discuss audit plans, key audit matters, and major accounting issues, as well as accounting risks and internal control of overseas corporations, cybersecurity and AI utilization risks.
Samjeong KPMG, which recommended Woori Financial as an audit firm, evaluated Woori Financial in a recommendation letter, “It made accounting transparency the basis for the growth of the comprehensive financial group and the enhancement of corporate value.”
◆ Increase accounting transparency and increase corporate value
Former Financial Services Commission Chairman Ko Seung-beom, who headed the judging committee, said, “Woori Financial Group has been highly praised for prioritizing audit quality and reliability of financial information over cost reduction, such as upgrading the group’s internal accounting management system that encompasses domestic and foreign corporations and maintaining sufficient audit time and resources even after the designated audit is over.”
“The competitiveness of financial companies eventually starts from the trust of customers and markets,” said Kwak Sung-min, vice president of Woori Financial Group. “I think today’s award is an encouragement to Woori Financial Group’s efforts to increase corporate value and achieve sustainable growth based on transparent accounting and management.” He added, “We will continue to contribute to the sound development of the Korean financial industry and capital market through transparent and responsible management.”
“Accounting transparency is a key infrastructure that not only increases the potential growth rate of the Korean economy through rational allocation of resources, but also helps sustain economic growth and leap forward,” Choi Un-yeol, chairman of the Korea CPA, said in a congratulatory speech. “Companies should think of accounting audits as investments that increase corporate value, not just costs,” he said. “Korea discounts will naturally be resolved when accounting transparency in all areas of society increases.”
