Financial regulators sanction Ascendio, two other firms over accounting violations

Financial authorities have voted to impose mandatory auditor designations on three companies — Ascendio, Myeonggayuup and Uiwang Baekun Project Financing Investment — for preparing and disclosing financial statements in violation of accounting standards. Accounting firms and certified public accountant audit teams that neglected their audit duties also received sanctions, including restrictions on audit work and additional contributions to a joint liability fund.

The Securities and Futures Commission, an arm of the Financial Services Commission, said Wednesday it held its 12th meeting and voted on measures against the three companies and their auditors.

Taeyul Accounting, Daejoo Accounting and Jeongmyeong Accounting, along with the Sonang CPA Audit Team and the Hyeondo CPA Audit Team, were also ordered to face restrictions on audit work for the respective companies for neglecting their audit duties.

Ascendio, a Kospi-listed company, failed in 2019 to properly review impairment indicators on shares in subsidiaries and did not recognize the resulting impairment losses.

The commission imposed a three-year mandatory auditor designation on Ascendio and recommended the dismissal of its former finance executive. Taeyul Accounting, which conducted the negligent audit, received a three-year ban on audit work for the company and was ordered to make an additional 50 percent contribution to the joint liability fund.

Myeonggayuup was found to have falsely and excessively recorded sales and purchases from 2017 to 2024 by booking intragroup fund transactions as revenue and procurement.

The commission imposed a three-year mandatory auditor designation and recommended the dismissal of the company's chief executive and a former executive in charge. The Sonang CPA Audit Team, Jeongmyeong Accounting and the Hyeondo CPA Audit Team — along with five certified public accountants affiliated with those firms — were also subject to audit work restrictions and other measures for their role in auditing Myeonggayuup.

Uiwang Baekun Project Financing Investment was found to have violated accounting standards from 2019 to 2023 by understating inventory assets and liabilities and misstating the cost of sales.

The commission voted to impose a one-year mandatory auditor designation on Uiwang Baekun Project Financing Investment and ordered its auditor, Daejoo Accounting, to face a two-year ban on audit work for the company and to make an additional 20 percent contribution to the joint liability fund.