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Doubts on Fraud Accounting Raised in Samil PricewaterhouseCoopers’ Audit of KAI
The Second DSME Case?
Doubts on Fraud Accounting Raised in Samil PricewaterhouseCoopers’ Audit of KAI
  • By Michael Herh
  • August 3, 2017, 18:00
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An allegation that Samil PricewaterhouseCoopers, the external auditor of KAI, committed wrongdoings in its audit of KAI is being generated.
An allegation that Samil PricewaterhouseCoopers, the external auditor of KAI, committed wrongdoings in its audit of KAI is being generated.

 

While the prosecution seized the circumstantial evidence of window dressing accounting of hundreds of billions of Korean won by Korea Aerospace Industries (KAI), an allegation that Samil PricewaterhouseCoopers, the external auditor of KAI, committed wrongdoings in its audit of KAI is being generated.

According to the Financial Supervisory Service's Electronic Disclosure System, Samil PwC, the external auditor of KAI evaluated all of the financial statements included in the KAI's audit report as appropriate ones from 2009 to the end of last year.

The prosecution is conducting an investigation of Ha Seong-yong, a former president of KAI, believing that Ha treated several tens of billions of won in window dressing settlement from 2013 until this year. KAI was reported to land a three trillion won (US$2.7 billion) order to export the light fighter FA-50s and build an air base to Iraq and applied the earnings to its accounting books against right accounting standards.

As a result, there is concern that this case will lead to the external auditor. The former and current accountants of Deloitte Anjin Accounting Corporation, which had served as an external auditor during a financial statements fraud by DSME were charged with accounting frauds. All of these accountants were convicted in the first trial in June.

The first half accounting report of KAI will be out on August 14. It attract a lot of people’s attention what audit opinions Samil PricewaterhouseCoopers will present.