Law Viewer

Back Home

CERTIFIED PUBLIC ACCOUNTANT ACT

Wholly Amended by Act No. 5255, Jan. 13, 1997

Amended by Act No. 5453, Dec. 13, 1997

Act No. 5505, Jan. 13, 1998

Act No. 5815, Feb. 5, 1999

Act No. 6107, Jan. 12, 2000

Act No. 6426, Mar. 28, 2001

Act No. 6994, Dec. 11, 2003

Act No. 7619, Jul. 29, 2005

Act No. 7796, Dec. 29, 2005

Act No. 8863, Feb. 29, 2008

Act No. 10303, May 17, 2010

Act No. 10303, May 17, 2010

Act No. 10812, jun. 30, 2011

Act No. 10866, Jul. 21, 2011

Act No. 13444, Jul. 24, 2015

Act No. 14119, Mar. 29, 2016

Act No. 14815, Apr. 18, 2017

Act No. 15017, Oct. 31, 2017

Act No. 15411, Feb. 21, 2018

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Act is to firmly establish a system for certified public accountants so as to contribute to the protection of rights and interests of the citizens, sound management of businesses, and development of the national economy.
 Article 2 (Scope of Functions)
Each certified public accountant shall perform the following services, at the request of clients:
1. Audits, appraisals, attestations, calculations, reorganizations or system set-up relating to accounting, or accounting services concerning establishment, etc. of a corporation;
2. Representation of taxation matters;
3. Services ancillary to subparagraphs 1 and 2.
 Article 3 (Qualification)
Each person who has passed the CPA examination shall be qualified as a certified public accountant.
 Article 4 (Grounds for Disqualification)
No person who falls under any of the following subparagraphs may be qualified as a certified public accountant: <Amended by Act No. 6426, Mar. 28, 2001; Act No. 7619, Jul. 29, 2005; Act No. 14815, Apr. 18, 2017>
1. Any person who is a minor, who is under adult guardianship, or under limited guardianship;
2. Any person who has been sentenced to imprisonment without labor or to a heavier punishment, and for whom five years have not yet elapsed since the completion of execution (including the cases in which the execution is deemed to have been completed) or the exemption from its execution;
3. Any person who has been consigned to a suspended sentence of imprisonment without labor or heavier punishment and for whom two years have not yet elapsed since the date on which the period of the stay is terminated;
4. Any person who has been consigned to a deferred sentence of imprisonment without labor or a heavier punishment, and is under a grace period;
5. Any person who has been declared bankrupt, and has not been reinstated;
6. Any person who has been dismissed or discharged from office by impeachment or disciplinary measures, or who has been expelled or whose registration was cancelled by this Act or the Certified Tax Accountant Act, and for whom five years have not yet elapsed since such incidents.
CHAPTER II EXAMINATION
 Article 5 (CPA Examination)
(1) The CPA examination (hereinafter referred to as the "examination") shall be administered by the Financial Services Commission and shall be composed of primary and secondary examinations. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 6994, Dec. 11, 2003; Act No. 8863, Feb. 29, 2008>
(2) Subjects of the examination and other necessary matters for the examination shall be prescribed by Presidential Decree. <Amended by Act No. 6994, Dec. 11, 2003>
(3) Any person who intends to take the examination shall fall under any of the following subparagraphs: <Newly Inserted by Act No. 6994, Dec. 11, 2003; Act No. 7619, Jul. 29, 2005>
1. A person who has earned not less than a certain number of credits in regular subjects at any university or college provided for in each subparagraph of Article 2 of the Higher Education Act, or at any lifelong educational establishment of in-house college style or distance college style provided for in Article 21 or 22 of the Lifelong Education Act (hereinafter referred to as "schools");
2. A person who is recognized to have earned not less than regular credits in regular subjects in accordance with the Act on Recognition of Credits, etc.;
3. A person who is recognized to have earned not less than a certain number of credits in regular subjects in accordance with the Act on the Acquisition of Academic Degrees through Self-Education.
(4) Ways of determining the kinds of subjects and the number of credits referred to in paragraph (3), standards for recognizing credits and qualifications for taking the examination shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 6994, Dec. 11, 2003>
(5) The head of every school and the head of every credit recognition institution referred to in paragraph (3) shall comply with any request from the Financial Services Commission or any person who intends to take the examination for confirming whether such person or any other person is qualified to take the examination. <Newly Inserted by Act No. 6994, Dec. 11, 2003; Act No. 8863, Feb. 29, 2008>
 Article 5-2 (Sanctions against Wrongdoers)
(1) With respect to the following persons, the Financial Services Commission shall suspend the relevant examination or cancel its decision of success in examinations:
1. A person who applies for the examination by unjust methods;
2. A person who cheats in the examination.
(2) No person subject to the dispositions provided for in paragraph (1) shall apply for examinations for five years from the date on which such dispositions are taken.
[This Article Newly Inserted by Act No. 15017, Oct. 31, 2017]
 Article 6 (Exemption from Part of Examinations)
(1) Any of the following persons shall be exempt from the primary examination: <Amended by Act No. 5505, Jan. 13, 1998; Act No. 6994, Dec. 11, 2003; Act No. 7619, Jul. 29, 2005; Act No. 7796, Dec. 29, 2005; Act No. 10303, May 17, 2010; Act No. 10866, Jul. 21, 2011>
1. Any public official of Grade V or higher or public official in the Senior Civil Service who has served for not less than three years in the fields of business accounting, auditing, or direct tax-related accounting;
2. Any person who has taught accounting for not less than three years as an associate professor or higher at a university or a junior college (including an equivalent educational institute);
3. Any person who has served for not less than five years in the field of accounting as an officer of a particular level or higher level determined by Presidential Decree at a bank provided for in Article 2 of the Banking Act or at an organization prescribed by Presidential Decree;
4. Any military officer of captain or higher who has served for not less than five years in the fields of finance management or auditing at a finance division in military installations;
5. Any person who is recognized by Presidential Decree as having equivalent or higher qualifications to those who are specified in sub- paragraphs 1 through 4.
(2) Any person who has passed the primary examination shall be exempt from the next primary examination.
(3) Paragraph (1) shall not apply to any of the following persons: <Newly Inserted by Act No. 13444, Jul. 24, 2015>
1. A person who has been dismissed or discharged from office by impeachment or disciplinary action;
2. A person who has been subject to disciplinary action equivalent to a demotion or suspension of work for receiving money, valuables, and entertainment while performing his or her official duties.
 Article 6-2 (Certified Public Accountant Qualification System Deliberation Committee)
(1) Any Certified Public Accountant Qualification System Deliberation Committee shall be established under the Financial Services Commission to deliberate on the following matters concerning the acquisition of qualification for a certified public accountant: <Amended by Act No. 8863, Feb. 29, 2008>
1. Matters concerning the examination of a certified public accountant such as subjects of the examination;
2. Matters concerning the fixed number of persons to be selected in the examination;
3. Other major matters concerning the acquisition of qualification for a certified public accountant.
(2) Matters necessary for the composition, operation, etc. of the Certified Public Accountant Qualification System Deliberation Committee shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 6107, Jan. 12, 2000]
CHAPTER III REGISTRATION AND COMMENCEMENT OF PRACTICE
 Article 7 (Registration)
(1) Where any person who is qualified as a certified public accountant intends to render services under Article 2 (including a case where any person intends to become an employee or a staff of an accounting corporation), he shall apply to the Financial Services Commission for registration as a certified public accountant after completing at least one year of the apprenticeship training in accordance with Presidential Decree: Provided, That a person who falls under each subparagraph of Article 6 (1) shall be exempt from such training. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 6994, Dec. 11, 2003; Act No. 8863, Feb. 29, 2008>
(2) The Financial Services Commission may support the apprenticeship training referred to in paragraph (1), as prescribed by Presidential Decree. <Newly Inserted by Act No. 6994, Dec. 11, 2003; Act No. 8863, Feb. 29, 2008>
(3) Application procedures for registration referred to in paragraph (1), documentation thereto, and other necessary matters shall be provided for in Presidential Decree.
(4) Registration under paragraph (1) may be renewed in accordance with Presidential Decree. In this case, a renewal period shall be not less than three years.
 Article 8 (Refusal of Registration)
(1) Where a person who applies for registration in accordance with Article 7 (1) falls under one of the following subparagraphs, the Financial Services Commission shall refuse such registration: <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
1. Where he falls under any of subparagraphs of Article 4;
2. Where he fails to undergo the training referred to in Article 7, even though he is required to do so.
(2) In the case of refusal of registration in accordance with paragraph (1), the Financial Services Commission shall immediately give notice specifying reasons for refusal to the applicant. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 9 (Cancellation of Registration)
(1) Where a certified public accountant registered under Article 7 falls under each of the following subparagraphs, the Financial Services Commission shall cancel the registration of a certified public accountant: <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
1. Where he falls under each subparagraph of Article 4;
2. Where he applies for the cancellation of registration;
3. Deleted; <by Act No. 6426, Mar. 28, 2001>
4. Where he dies.
(2) The provisions of Article 8 (2) shall apply mutatis mutandis to the case of paragraph (1) 1 and 2. <Amended by Act No. 6426, Mar. 28, 2001>
 Article 10 Deleted. <by Act No. 6426, Mar. 28, 2001>
 Article 11 (Prohibition against Uses of Similar Name or Title)
No person unqualified as a certified public accountant shall use the title of certified pubic accountant or similar title.
CHAPTER IV RIGHTS AND OBLIGATIONS
 Article 12 (Establishment of Offices)
(1) Any certified public accountant may establish an office so as to carry out functions referred to in Article 2.
(2) No certified public accountant shall be allowed to have two offices or more for any reasons.
 Article 13 (Clerks)
(1) Any certified public accountant may employ clerks to assist him/her in carrying out his/her functions (hereinafter referred to as "clerks").
(2) Any certified public accountant has a responsibility for instructing and supervising the clerks.
 Article 14 Deleted. <by Act No. 5815, Feb. 5, 1999>
 Article 15 (Duties of Impartiality, Good Faith, etc.)
(1) Any certified public accountant shall carry out his functions in impartial and sincere ways, and shall keep independence in performing his functions.
(2) No certified public accountant shall do activities leading to degradation.
(3) No certified public accountant shall intentionally conceal truth in performing functions and file false reports.
 Article 16 (Compliance with Bylaws)
Any certified public accountant shall comply with bylaws of the Korean Institute of Certified Public Accountants.
 Article 17 Deleted. <by Act No. 6426, Mar. 28, 2001>
 Article 18 (Keeping of Books)
Any certified public accountant shall draw up books relating to his/her functions and keep them in his/her office.
 Article 19 (Guarantee of Liability for Damage)
Where a certified public accountant (excluding certified public accounts belonging to certified public accountants corporations) causes, on purpose or by negligence, losses to his/her clients (including a bona fide third person in the case of carrying out functions referred to in subparagraph 1 of Article 2) while carrying out his/her functions, he/she shall take necessary measures so as to cover liability for compensation payment to clients, such as subscription for mutual-aid association administered by the Korean Institute of Certified Public Accountants in accordance with its bylaws or purchase of insurance, etc. as prescribed by Presidential Decree.
 Article 20 (Duty of Confidentiality)
No certified public accountant or his clerks, or no former certified public accountant or his clerks shall disclose confidential information which was obtained in the course of performing his functions: Provided, That if there are contrary provisions in other statutes, this provision shall not apply.
 Article 21 (Restrictions on Functions)
(1) No certified public accountant shall be allowed to carry out functions relating to auditing or certifying financial statements (including consolidated financial statements provided for in Article 1-2 of the Act on External Audit of Stock Companies; hereinafter the same shall apply) for any of the following persons: <Amended by Act No. 6994, Dec. 11, 2003; Act No. 7619, Jul. 29, 2005>
1. Any person (including any company; hereinafter the same shall apply in this Article) for whom a certified public accountant or his spouse is holding an office of directorship or equivalent position (including a position in charge of works relating to financial matters), or has held such an office during the preceding one year;
2. Any person who employs certified public accountants or their spouses or has employed them during the preceeding one year;
3. Any person, other than those provided for in subparagraphs 1 and 2, who is recognized by Presidential Decree as having obvious interests with a certified public accountant or his spouse so as to make it difficult for the certified public accountant to carry out his functions fairly.
(2) Any certified public accountant, who is contracted to perform the business auditing or certifying the financial statement of any specific company (where the relevant company prepares consolidated financial statements, having a relationship between parent company and subsidiary prescribed in subparagraph 2 of Article 1-2 of the Act on External Audit of Stock Companies with another company, including such company), shall be prohibited from performing any of the following business for the relevant company during the contract term: <Newly Inserted by Act No. 14119, Mar. 29, 2016; Act No. 15017, Oct. 31, 2017>
1. The business of making accounting records and compiling financial statement;
2. The business of conducting internal audit by agent;
3. The business of creating or operating the financial information system;
4. The business (excluding matters prescribed by Presidential Decree to recover non-performing loans) prescribed by Presidential Decree to sell or purchase assets, capital, and other rights (hereinafter referred to as “assets, etc.”):
(a) Inspection, financial reporting, and value assessment of assets, etc.;
(b) Presentation of opinions regarding the sale and purchase of assets, etc. or validity of contracts;
5. Assistance business regarding personnel and organizations, etc.;
6. Insurance actuary business related to calculating the amount of provision for insurance benefits recognized in the financial statement;
7. Consultation on civil and criminal procedure;
8. Arrangement and brokerage related to financing and investment;
9. Decision-making on business administration, such as the disposal and transfer of important assets, and appointment or dismissal, etc. of managers, which falls into the duties of executives or persons in positions equivalent thereto;
10. Other business prescribed by Presidential Decree as the one which could incur conflicts of interest with the business auditing and certifying financial statements.
(3) The certified public accountant referred to in paragraph (2) may perform any business other than the business falling under each subparagraph of the same paragraph in accordance with the procedures prescribed by Presidential Decree including internal control procedures, etc. <Amended by Act No. 14119, Mar. 29, 2016>
 Article 22 (Prohibition on Lease of Name or Title)
(1) No certified public accountant shall be allowed to let other persons carry out functions provided for in Article 2 under his name or business name, nor shall lease his/her registration certificate.
(2) No certified public accountant may acquire rights in dispute.
(3) In the case of performance of functions under Article 2, no certified public accountant may receive, ask for, or agree on money or other ben- efits in exchange for illegal favors, or participate in conspiracy or consultation with his/her clients so that they can earn unjustifiable monetary interests by fraud or other improper means.
CHAPTER V ACCOUNTING CORPORATIONS
 Article 23 (Establishment)
(1) Each certified public accountant may establish an accounting corporation in order to systematically and professionally render services referred to in Article 2.
(2) The following matters shall be included in the articles of incorporation of each accounting corporation:
1. Objectives;
2. Name;
3. Locations of the principal office and branch offices;
4. Names, resident registration numbers (foreign registration numbers for foreign certified public accountants) and addresses of partners and directors;
5. Per share amount;
6. Number of shares of each partner;
7. Total amount of capital;
8. Matters concerning how to make up for losses;
9. Matters concerning the general meetings of partners;
10. Matters concerning the representative director;
11. Matters concerning services;
12. Timing and grounds when the duration of existence or grounds for dissolution is prescribed.
[This Article Wholly Amended by Act No. 10812, Jun. 30, 2011]
 Article 24 (Registration of Accounting Corporation)
(1) Any accounting corporation shall, when it intends to offer services under Article 2, file a registration thereof with the Financial Services Commission, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>
(2) Any accounting corporation intending to file the registration under paragraph (1) shall satisfy the following requirements:
1. It is required to be in conformity with the provisions of Articles 26 and 27 (1);
2. Contents of registration-application documents are required not to be in violation of this Act or orders given under this Act;
3. Registration-application documents are required not to contain any false entry.
(3) In the event that any person who files a registration is found not to satisfy the requirements referred to in paragraph (2), the Financial Services Commission may deny such registration. If the registration-application documents are found to be imperfect, the Financial Services Commission may ask the applicant to supplement such documents for a fixed period. <Amended by Act No. 8863, Feb. 29, 2008>
(4) Necessary matters concerning procedures for registering any accounting corporation under paragraph (1) and necessary documents therefor, etc. shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 6426, Mar. 28, 2001]
 Article 25 Deleted. <by Act No. 6426, Mar. 28, 2001>
 Article 26 (Directors, etc.)
(1) Each accounting corporation shall have not less than three directors who are certified public accountants: Provided, That none of the following persons shall become a director:
1. A person who is not a partner;
2. A person subject to the disposition of suspension of practice (including the disposition of partial suspension of practice) pursuant to Article 48 who is still under the suspension of practice;
3. A person who was a director of an accounting corporation the registration of which was cancelled or the practice of which was suspended under Article 39 (limited to persons who were directors at the time when the ground for the cancellation of registration or suspension of practice occurred) and for whom three years have not passed since the cancellation of registration or who is under the suspension of practice;
4. A foreign certified public accountant referred to in subparagraph 1 of Article 40-2.
(2) Each accounting corporation shall have not less than ten certified public accountants among its directors and employees.
(3) No certified public accountant referred to in paragraph (2) who is not a director (hereinafter referred to as "affiliated certified public accountant") shall fall under paragraph (1) 2.
(4) Each accounting corporation shall have representative directors, as prescribed by Ordinance of the Prime Minister.
(5) Each partner of an accounting corporation shall be a certified public accountant (including foreign certified public accountants employed by the relevant accounting corporation) and each accounting corporation shall have three or more partners.
[This Article Wholly Amended by Act No. 10812, Jun. 30, 2011]
 Article 27 (Capital, etc.)
(1) The capital of an accounting corporation shall be at least 500 million won. <Amended by Act No. 6426, Mar. 28, 2001>
(2) Where the amount computed by the deduction of total deficit from total amount of assets in the balance sheet at the end of the preceding business year is below the amount determined by Presidential Decree, an accounting corporation shall make up for the difference by members' gifts or increase the capital within six months from the date on which such business year ends.
(3) In the case of gifts under paragraph (2), they shall be added up as a special profit.
(4) The Financial Services Commission may order an accounting corporation to make up for deficits or to increase capital for a fixed period if the accounting corporation fails to make up for deficits or increase capital in accordance with paragraph (2). <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 28 (Reserves for Damage Compensation)
(1) Every accounting corporation shall use its reserve to compensate for damage in every business year in accordance with Presidential Decree so as to cover liability to compensate for losses (including liability to compensate losses under Article 17 of the Act on External Audit of Stock Companies) caused to the clients (including a bona fide third person in the cases of carrying out functions under subparagraph 1 of Article 2) while performing functions under Article 2. <Amended by Act No. 7619, Jul. 29, 2005>
(2) The reserve for damage compensation under paragraph (1) shall not be used for other purposes than compensation, unless the Financial Services Commission approves otherwise. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 29 (Restrictions, etc. on Contributions in Other Corporations)
(1) No accounting corporation may contribute in other corporations or provide guarantees for obligations of others in excess of the amount computed by multiplying its own equity capital by such rates as prescribed by Presidential Decree.
(2) The own equity capital referred to in paragraph (1) shall mean the sum of money computed by deducting total deficit (excluding the reserve for damage compensation) from total assets in balance sheet at the end of the preceding business year.
 Article 30 (Settlement of Accounts, etc.)
(1) Except as otherwise provided for in this Act, every accounting corporation shall settle accounts on the basis of accounting standards set forth in Article 13 of the Act on External Audit of Stock Companies. <Amended by Act No. 7619, Jul. 29, 2005>
(2) Every accounting corporation shall prepare a financial statement in accordance with subparagraph 1 of Article 1-2 of the Act on External Audit of Stock Companies and submit it to the Financial Services Commission within three months after the end of each business year. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 7619, Jul. 29, 2005; Act No. 8863, Feb. 29, 2008>
(3) The Financial Services Commission may, where deemed necessary, inspect whether or not such financial statements as referred to in paragraph (2) are reliably formulated. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 31 (Name)
(1) Any accounting corporation shall use the words of "accounting corporation" in its name.
(2) Any person other than an accounting corporation shall not be allowed to use the words "accounting corporation" or similar.
 Article 32 (Offices)
(1) An accounting corporation may have regional offices besides a main office under the conditions as prescribed by Presidential Decree.
(2) No director or member accountant of an accounting corporation may have an office other than the accounting corporation to which he belongs.
 Article 33 (Restrictions on Functions)
(1) An accounting corporation may not perform functions of auditing and certifying financial statements for any of the following persons: <Amended by Act No. 6994, Dec. 11, 2003; Act No. 7619, Jul. 29, 2005>
1. Any person (including any company; hereinafter the same shall apply in this Article) of which shares are owned, or for which contributions are made by the accounting corporation;
2. Any person with whom members of the accounting corporation have relations provided for in each subparagraph of Article 21 (1);
3. Any person who is undeniably interested in any accounting corporation other than the accounting corporations referred to subparagraphs 1 and 2 or is prescribed by Presidential Decree as being recognized to have been interested in such accounting corporation during the preceeding one year.
(2) The provisions of Article 21 (2) and (3) shall apply mutatis mutandis to every accounting corporation. <Newly Inserted by Act No. 6994, Dec. 11, 2003>
 Article 34 (Methods of Rendering Services)
(1) No accounting corporation shall have any person other than its directors render services of auditing and certifying the accounting: Provided, That this shall not apply to the case where its member accountants serve as assistants to the accounting corporation.
(2) Where an accounting corporation audits or certifies financial statements, its representative director referred to in Article 26 (4) shall indicate the name of his accounting corporation, sign his name and put his seal upon the relevant documents.
 Article 35 (Prohibition of Competitive Practices)
No director or member accountant of an accounting corporation may render services falling under the extent of services of the accounting corporation for him/herself or for a third person, and may be employed as a director or member accountant of other accounting corporations.
 Article 36 (Withdrawal)
Any member shall be considered to have been automatically withdrawn for reasons specified in each of the following subparagraphs:
1. Where his registration has been canceled under Article 9;
2. Where he falls under Article 26 (1) 2;
3. Where grounds provided for in articles of incorporation have taken place;
4. Where there happens a resolution by the general meetings of members.
 Article 37 (Dissolution)
(1) An accounting corporation shall be dissolved for the following reasons: <Amended by Act No. 6426, Mar. 28, 2001>
1. Occurrence of events provided for in articles of incorporation;
2. Resolution by the general meetings of members;
3. Merger;
4. Cancellation of registration;
5. Insolvency;
6. Order or judgment of court.
(2) In the event that the grounds of paragraph (1) 1 through 3 occur, the accounting corporation shall notify the Financial Services Commission of such fact. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
(3) In the case of dissolution provided for in paragraph (1), the account- ing corporation shall deposit a sum of money accountable for the reserve for damage compensation (referring to the sum of money specified in bal- ance sheet at the end of the preceding business year before dissolution) provided for in Article 28 (1) separately with the Korean Institute of Certified Public Accountants.
(4) Matters necessary for the management or operation of deposits referred to in paragraph (3) shall be prescribed by Presidential Decree.
 Article 38 (Report on Change in Articles of Incorporation)
Where changes are made with respect to the matters of subparagraphs 1, 7 (limited to a case where the capital decreases) and 11 from among entries of the articles of incorporation as prescribed in Article 23 (2), any accounting corporation shall promptly file a report thereon with the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>
[This Article Wholly Amended by Act No. 6426, Mar. 28, 2001]
 Article 39 (Cancellation of Registration, etc.)
(1) Where an accounting corporation falls under any of the following subparagraphs, the Financial Services Commission may cancel its registration or may suspend services, in whole or in part, for a fixing period not exceeding one year: Provided, That in the case of subparagraphs 1 through 3, such registration shall be canceled: <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
1. Where an accounting corporation which does not meet requirements specified in Article 26 (1), (2), or 27 (1) fails to supplement such requirements within three months;
2. Where an accounting corporation has made a registration under Article 24 (1) in a false or unlawful manner;
3. Where an accounting corporation has rendered the services in violation of the suspension order;
4. Where an accounting corporation has violated the provisions of Articles 26 (4), 27 (2), 28, 29, 30 (1) or (2), 31 (1), 33, 34 or 38 (including the provisions of Articles 15 (1) and (3), 16, 18, 20 or 22 that are applied mutatis mutandis in the provisions of Article 40);
5. Where an accounting corporation has made gross mistakes or omissions in auditing or certification;
6. Where an accounting corporation has violated this Act or order made under this Act.
(2) Deleted. <by Act No. 5453, Dec. 13, 1997>
 Article 39-2 (Hearing)
Where the Financial Services Commission intends to cancel the registration of an accounting corporation under Article 39, it shall hold a hearing. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
[This Article Newly Inserted by Act No. 5453, Dec. 13, 1997]
 Article 40 (Applicable Provisions)
(1) The provisions of Articles 13, 15 (1) and (3), 16, 18, 20, 22 and 48 (4) shall apply mutatis mutandis to any accounting corporation unless they are contradictory to the nature thereof. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 7619, Jul. 29, 2005>
(2) With respect to matters concerning accounting corporations other than those specified in this Act, the provisions relating to limited partnerships of the Commercial Act shall apply mutatis mutandis. <Amended by Act No. 7619, Jul. 29, 2005>
CHAPTER V-2 FOREIGN CERTIFIED PUBLIC ACCOUNTANTS AND FOREIGN ACCOUNTING CORPORATIONS
 Article 40-2 (Definitions)
The terms used in this Chapter shall be defined as follows:
1. The term "foreign certified public accountant" means certified public accountants registered in nations, other than Korea, in accordance with statutes of the relevant nations by satisfying all requirements necessary for practicing and registered with the Financial Services Commission pursuant to Article 40-4 (1);
2. The term "foreign accounting corporation" means accounting corporations, or organizations equivalent thereto established in foreign nations, other than Korea, in accordance with statutes of the relevant nations with their principal offices located in the relevant nations, and registered pursuant to Article 40-7 (1);
3. The term "foreign accounting office" means offices established in Korea by foreign certified public accountants or foreign accounting corporations to provide services referred to in Article 40-3;
4. The term "original qualification nation" means nations (in cases of foreign accounting corporations, nations in which their principal offices are located) in which foreign certified public accountants or foreign accounting corporations have completed all procedures necessary for legitimate practicing: Provided, That when one nation consists of several states, provinces, autonomous districts, etc. granting a regionally limited qualification, all the states, provinces, autonomous districts, etc. in which the relevant qualification is recognized in accordance with statutes of the relevant nation shall be deemed original qualification nation;
5. The term "treaties, etc." means all kinds of agreements in effect that Korea has concluded with foreign nations (including unions of nations, such as federations of nations and economic communities) on the practice of certified public accountants in the respective nations concerned.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-3 (Scope of Services)
Each foreign certified public accountant and foreign accounting corporation shall provide the following services commissioned by other persons:
1. Consulting on the financial law and financial reporting standards of the original qualification nation;
2. Consulting on the internationally recognized international financial law and international financial reporting standards.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-4 (Registration of Foreign Certified Public Accountants)
(1) Any foreign certified public accountant whose orignal qualification nation is a party to treaties, etc. shall be registered with the Financial Services Commission when intending to provide services referred to in Article 40-3.
(2) Any person who intends to make a registration referred to in paragraph (1) shall file an application for registration with the Financial Services Commission, as prescribed by Presidential Decree.
(3) When the Financial Services Commission finds no grounds for rejecting a registration, which are referred to in Article 40-5 with respect to an application referred to in paragraph (2), it shall register it in the roster of foreign certified public accountants without delay and issue a registration certificate. In such cases, the original qualification nation thereof shall be stated in the roster of foreign certified public accounts as well as in the registration certificate.
(4) The term of validity of registration referred to in paragraph (3) shall be five years.
(5) An application for the renewal of registration shall be filed during the period from one month to six months before the termination of the term of validity referred to in paragraph (4).
(6) Other matters necessary for the registration of foreign certified public accountants and the renewal thereof shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-5 (Rejection to Register Foreign Certified Public Accountants)
When a person who intends to file an application for registration referred to in Article 40-4 (2) or to file an application for the renewal of registration referred to in paragraph (5) of the same Article falls under any of the following subparagraphs, the Financial Services Commission may reject such registration or such renewal of registration. In such cases, the Financial Services Commission shall notify the applicant thereof without delay, specifying the ground therefor in detail:
1. Where the said person falls under the grounds for disqualification referred to in Article 4 (including cases where the said person falls under the grounds for disqualification referred to in Article 4 in accordance with statutes of the original qualification nation);
2. Where grounds for the cancellation of registration referred to in Article 40-6 are found.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-6 (Cancellation of Registration of Foreign Certified Public Accountants)
When a foreign certified public accountant registered pursuant to Article 40-4 (1) falls under any of the following subparagraphs, the Financial Services Commission shall cancel the registration thereof:
1. Where the registration of said foreign certified public accountant has been cancelled or said foreign certified public accountant has been subject to the disposition of suspension of practice or other dispositions equivalent thereto in the original qualification nation;
2. Where said foreign certified public accountant has fallen under any subparagraph of Article 9 (1) (including cases where the said foreign certified public accountant falls under grounds for disqualification referred to in Article 4 in accordance with statutes of the original qualification nation);
3. Where the said foreign certified public accountant has made a registration referred to in Article 40-4 (1) by fraud or other improper means;
4. Where the term of validity of registration referred to in Article 40-4 (4) has expired.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-7 (Registration of Foreign Accounting Corporations)
(1) Any foreign accounting corporation the orignal qualification nation of which is a party to treaties, etc. shall be registered with the Financial Services Commission when intending to provide services referred to in Article 40-3 by establishing a foreign accounting office.
(2) Any foreign accounting corporation intending to make a registration referred to in paragraph (1) shall file an application for registration with the Financial Services Commission, as prescribed by Presidential Decree.
(3) Unless the Financial Services Commission has a special circumstance with respect to an application referred to in paragraph (2), it shall register it in the roster of foreign accounting corporations without delay and issue a registration certificate. In such cases, the original qualification nation shall be stated in the roster of foreign accounting corporations as well as in the registration certificate.
(4) Other matters necessary for procedures for the registration of foreign accounting corporations, required documents, etc. shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-8 (Cancellation of Registration of Foreign Accounting Corporations, etc.)
Where a foreign accounting corporation falls under any of the following subparagraphs, the Financial Services Commission may order the cancellation of a relevant registration, or suspension of practice in full or in part for a period not longer than one year: Provided, That where a foreign accounting corporation falls under any of subparagraphs 1 through 7, the relevant registration shall be cancelled, and Article 39-2 shall apply mutatis mutandis to procedures for the cancellation of registration:
1. Where the registration of a foreign accounting corporation has been cancelled or a foreign accounting corporation has been subject to the suspension of practice or other dispositions equivalent thereto in the orignal qualification nation;
2. Where a foreign accounting corporation has provided services in violation of an order for the suspension of practice;
3. Where a foreign accounting corporation has provided services outside the scope of services in violation of Article 40-3;
4. Where a foreign accounting corporation has made a registration referred to in Article 40-7 (1) by false or other unjust means;
5. Where a foreign accounting corporation has employed certified public accountants registered pursuant to Article 7 (1) in violation of Article 40-10 (1);
6. Where a foreign accounting corporation has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);
7. Where a foreign accounting corporation has established or operated an accounting corporation in joint with certified public accountants or accounting corporations by means of the establishment of corporations, equity sharing and entrustment of management or other methods, in violation of Article 40-10 (3);
8. Where a foreign accounting corporation has failed to use a name including the name of the original qualification nation when indicating its qualification, in violation of Article 40-11 (1);
9. Where a foreign accounting corporation has failed to indicate the name of the original qualification nation and office when establishing a foreign accounting office, in violation of Article 40-11 (2);
10. Where a foreign accounting corporation has failed to indicate the original qualification nation in a place inside or outside the foreign accounting office, in violation of Article 40-11 (3);
11. Where a foreign accounting corporation has failed to expressly state the original qualification nation and scope of services to commissioning persons before entering into commissioning contracts, in violation of Article 40-11 (4);
12. Where a representative director has failed to indicate the original qualification nation and the name of the accounting corporation in or has failed to affix his/her signature and seal to relevant documents, in violation of Article 40-11 (5);
13. Where a foreign accounting corporation has failed to submit a business report within three months after the termination of the relevant business year, in violation of Article 40-13 (1);
14. Where a foreign accounting corporation has failed to comply with the demand of the Financial Services Commission for the submission of data, in violation of Article 40-13 (2);
15. Where a foreign accounting corporation has violated provisions applicable mutatis mutandis in accordance with Article 40-18.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-9 (Practicing Methods of Foreign Certified Public Accountants)
(1) Each foreign certified public accountant shall provide services referred to in Article 40-3 only by one of the following methods:
1. Establishment of a foreign accounting office;
2. Being employed by a foreign certified public accountant or foreign accounting corporation;
3. Being employed by an accounting corporation registered pursuant to Article 24.
(2) No foreign certified public accountant shall affiliate to nor be employed by two or more accounting corporations (including foreign accounting corporations) and foreign certified public accountants at the same time nor concurrently hold such office.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-10 (Prohibition of Employment, Partnership, etc.)
(1) Neither foreign certified public accountant nor foreign accounting corporation shall employ certified public accountants registered pursuant to Article 7 (1).
(2) Neither foreign certified public accountant nor foreign accounting corporation shall provide services referred to in Article 40-3 in joint with certified public accountants or accounting corporations by means of the joint acceptance of cases or other methods, or share fees or profits earned therefrom with certified public accountants or accounting corporations.
(3) Each foreign accounting corporation shall neither establish nor operate accounting corporations jointly with certified public accountants or accounting corporations by means of the establishment of corporations, equity sharing, entrustment of management or other methods.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-11 (Indication of Qualification, etc.)
(1) Where a foreign certified public accountant or a foreign accounting corporation indicates his/its qualification to provide services, he/she or it shall use the name of the original qualification nation widely used in Korea followed by "certified public accountant" or "accounting corporation": Provided, That where an original qualification nation is a region of a nation, such as a state, province or autonomous district, the name of the nation to which such region belongs, which is followed by "certified public accountant" or "accounting corporation" may be used.
(2) Where a foreign certified public accountant or a foreign accounting corporation establishes a foreign accounting office, he/she or it shall use the names of the original qualification nation and office (referring to the name of the office of headquarters in cases of foreign accounting corporations) followed by "accounting office."
(3) Each foreign certified public accountant and foreign accounting corporation shall put public notice of the original qualification nations of the foreign certified public accountants, foreign accounting corporation and affiliated foreign certified public accountants in a place recognized to be suitable for putting public notice inside or outside the relevant foreign accounting office.
(4) Each foreign certified public accountant and foreign accounting corporation shall expressly state the original qualification nation and scope of services to commissioning persons before entering into commissioning contracts.
(5) When a foreign accounting corporation has provided services referred to in Article 40-3, the representative director thereof shall indicate the original qualification nation and the name of the accounting corporation in and affix his/her signature and seal to relevant documents.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-12 (Investment in Accounting Corporations)
Foreign certified public accountants may invest in an accounting corporation established pursuant to Article 23 within the scope of less than 50/100 of investment share with a voting right or total amount of capital of the relevant accounting corporation. In such cases, the upper limit of the amount of investment per foreign certified public accountant shall be less than 10/100 of investment share with a voting right or total amount of capital of the relevant accounting corporation.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-13 (Submission of Business Reports, etc.)
(1) Each foreign certified public accountant and foreign accounting corporation shall prepare business reports prescribed by Ordinance of the Prime Minister and submit them to the Financial Services Commission within three months of the end of each business year.
(2) When the Financial Services Commission requests, specifying grounds therefor in detail, relevant foreign certified public accountants and foreign accounting corporations shall submit data on the current state of relevant business.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-14 (Obligation to Sojourn)
(1) Each foreign certified public accountant shall sojourn in Korea for not less than 180 days in a year from the date on which he/she commences practicing for the first time.
(2) When a foreign certified public accountant sojourns in foreign nations due to unavoidable circumstances, such as injuries or illness suffered by the person in question or his/her relatives, he/she shall be deemed to have sojourned in Korea during such period.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-15 (Submission of Required Documents)
(1) Any document required to be submitted by foreign certified public accountants and foreign accounting corporations under this Act shall be an original copy or certified duplicate copy, and any document written in foreign languages shall be accompanied by notarized Korean translation.
(2) When a foreign certified public accountant or a foreign accounting corporation is subject to the cancellation of registration, suspension of practice, or other dispositions equivalent thereto in the original qualification nation, he/it shall report such fact to the Financial Services Commission without delay.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-16 (Confidentiality)
Neither foreign certified public accountant and the office workers thereof nor former foreign certified public accountant and the former office workers thereof shall divulge confidential matters they becomes aware of in the course of conducting duties inside or outside Korea: Provided, That the same shall not apply to cases specially prescribed in other statutes.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-17 (Disciplinary Actions)
(1) The Financial Services Commission may take disciplinary actions referred to in Article 48 (2) against foreign certified public accountants in any of the following cases:
1. Where a foreign certified public accountant has provided services outside the scope of services in violation of Article 40-3;
2. Where a foreign certified public accountant has provided services in violation of methods prescribed in Article 40-9 (1);
3. Where a foreign certified public accountant has affiliated to or has been employed by two or more accounting corporations (including foreign accounting corporations) and foreign certified public accountants at the same time or has concurrently held such office in violation of Article 40-9 (2);
4. Where a foreign certified public accountant has employed certified public accountants registered pursuant to Article 7 (1) in violation of Article 40-10 (1);
5. Where a foreign certified public accountant has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);
6. Where a foreign certified public accountant has failed to use a name including the name of the original qualification nation when indicating his/her qualification, in violation of Article 40-11 (1);
7. Where a foreign certified public accountant has failed to indicate the names of the original qualification nation and office when establishing a foreign accounting office, in violation of Article 40-11 (2);
8. Where a foreign certified public accountant has failed to put public notice of the original qualification nation inside or outside the foreign accounting office, in violation of Article 40-11 (3);
9. Where a foreign certified public accountant has failed to expressly state the original qualification nation and scope of services to commissioning persons before concluding commissioning contracts, in violation of Article 40-11 (4);
10. Where a foreign certified public accountant has invested not less than 10/100 of the total amount of capital in an accounting corporation in violation of Article 40-12;
11. Where a foreign certified public accountant has sojourned in Korea for less than 180 days in a year in violation of Article 40-14;
12. Where a foreign certified public accountant has divulged confidential matters he/she knew in the course of providing services inside or outside Korea in violation of Article 40-16;
13. Where a foreign certified public accountant has fallen under Article 48 (1) 1, 3 or 4.
(2) No disciplinary action referred to in paragraph (1) shall be taken three years after the date on which a cause falling under any subparagraph of paragraph (1) occurs.
(3) The procedures for disciplinary actions against certified public accountants shall apply mutatis mutandis to matters concerning disciplinary actions against foreign certified public accountants.
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
 Article 40-18 (Provisions Applicable Mutatis Mutandis)
Articles 11 through 13, 15, 16, 18, 19, 22, 24 (2) 3 and (3), 28, 30 (1) and (3), 31 (2), 32, 35, 42, 43 (2), 45 (1) and (3), 48 (3) and (5) and 48-2 shall apply mutatis mutandis to foreign certified public accountants and foreign accounting corporations unless they are contradictory to the nature thereof. In such cases, "certified public accountant" and "accounting corporation" shall be deemed "foreign certified public accountant" and "foreign accounting corporation," respectively. <Amended by Act No. 15017, Oct. 31, 2017>
[This Article Newly Inserted by Act No. 10812, Jun. 30, 2011]
CHAPTER IV RIGHTS AND DUTIES
 Article 41 (Purpose and Establishment)
(1) The Korean Institute of Certified Public Accountants (hereinafter referred to as the "Institute") shall be established to heighten morality, to improve or develop functions of certified public accountants, and to instruct or supervise its members.
(2) The Institute shall be a corporation.
(3) The Institute shall prepare bylaws and shall be established with the approval of the Financial Services Commission, pursuant to Presidential Decree. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
(4) The Institute may have affiliate or branch associations.
(5) The Institute shall seek approval from the Financial Services Commission with regard to the amendment to the bylaws of association and the establishment of affiliate or branch associations. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 42 (Compulsory Membership)
Any certified public accountant who is registered under Article 7 (1) or any accounting corporation that is registered under Article 24 (1) shall enter into the Institute. <Amended by Act No. 6426, Mar. 28, 2001>
 Article 43 (Rules on Ethical Duties)
(1) The Institute shall make rules and regulations relating to professional ethics which members shall observe while performing their functions.
(2) Members shall comply with rules and regulations on professional ethics.
 Article 44 (Entrustment, etc. of Services)
(1) Public institutions may entrust matters which fall under the functions of certified public accountant under Article 2 to the Institute or make a request for consultation with it.
(2) Where the Institute is entrusted with services or requested for consultation in accordance with paragraph (1), it may have members carry out such services or consultation.
(3) The Institute may, if necessary, make a recommendation for improvement to the entrusting or requesting institution under paragraph (1).
 Article 45 (Conciliation of Disputes)
(1) The Institute shall, upon the request of disputing parties, afford conciliation of disputes arising from functions between certified public accountants (including accounting corporations; hereafter the same shall apply in this Article), or between a certified public accountant and his client (including a bona fide third person under Articles 19 and 28 (1)).
(2) A conciliation committee shall be established in the Institute to resolve disputes referred to in paragraph (1).
(3) The composition or operation of the conciliation commission described in paragraph (2), or other necessary matters shall be prescribed by Presidential Decree.
 Article 46 (Training, etc. of Members)
(1) The Institute shall provide training to the following persons and instruct or supervise a voluntary training program of members:
1. Members;
2. Any person who intends to register as a certified public accountant in accordance with Article 7;
3. Clerks, etc. described in Article 13.
(2) The Institute shall have an accounting training center to perform the training pursuant to paragraph (1).
(3) The Institute shall determine matters necessary for training and supervising pursuant to paragraph (1), with the approval of the Financial Services Commission. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
 Article 47 (Supervision)
(1) The Institute shall be under the supervision of the Financial Services Commission. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
(2) The Financial Services Commission, where deemed necessary, may have the Institute submit reports, or may have public officials under its control examine the current state of services rendered by the Institute and other documents. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
(3) Public officials who conduct examinations, pursuant to paragraph (2), shall show credentials indicating his authority to relevant persons.
CHAPTER VII DISCIPLINARY ACTION
 Article 48 (Disciplinary Action)
(1) Where a certified public accountant falls under any of the following subparagraphs, the Financial Services Commission may take a disciplinary action against him as prescribed in paragraph (2) in accordance with a resolutions of the Certified Public Accountants Disciplinary Committee: <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
1. Where he violates this Act or order issued under this Act;
2. Where he makes gross mistakes or omissions in audit or certification;
3. Where he violates the bylaws of the Institute;
4. Where he causes damage to the integrity of certified public accountants regardless of accountant's functions or other functions.
(2) Types of disciplinary action against certified public accountant shall be as follows:
1. Cancellation of registration;
2. Suspension of performance of duties for two years or less;
3. Suspension of performance of some duties for one year or less;
4. Reprimand.
(3) The Institute may, where it recognizes the existence of the grounds for taking a disciplinary action falling under each subparagraph of paragraph (1) against a certified public accountant (including any certified public accountant affiliated with any accounting corporation; hereinafter the same shall apply in this Article) who is its member, file a request, accompanied by evidential documents, with the Financial Services Commission for taking such disciplinary action. <Amended by Act No. 6426, Mar. 28, 2001; Act No. 8863, Feb. 29, 2008>
(4) The disciplinary action under paragraph (1) shall not be taken after three years have elapsed from the date when reasons provided for in each subparagraph of paragraph (1) arise.
(5) Matters relating to the Certified Public Accountants Disciplinary Committee shall be prescribed by Presidential Decree.
 Article 48-2 (Notification, Publication, etc. of Measures, etc.)
(1) Where the Financial Services Commission takes a measure or disciplinary action pursuant to Articles 39 (1) and 48 (1), it shall notify the relevant accounting corporations, certified public accountants, the Institute, and the Securities and Futures Commission of the cause thereof without delay, respectively, clarifying such cause in detail and publish the details thereof in the Official Gazette, internet website, etc.
(2) The Institute shall make public the matters notified pursuant to paragraph (1) by the method of posting on its internet website, etc. for at least three months.
(3) Where a person who intends to appoint an auditor prescribed in Article 3 of the Act on External Audit of Stock Companies requests the reading and reproduction of information on measures or disciplinary actions to know about the measures taken against the relevant accounting corporation or the fact that a certified public account was subject to disciplinary action, the Institute shall provide such information.
(4) Matters necessary for the scope of making public, methods of implementing, methods and procedures of reading and reproduction, etc. of measures or disciplinary actions prescribed in paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 15017, Oct. 31, 2017]
 Article 49 Deleted. <by Act No. 5453, Dec. 13, 1997>
CHAPTER VIII SUPPLEMENTARY PROVISIONS
 Article 50 (Restrictions on Services)
Any person other than certified public accountants who have been registered under Articles 7 or accounting corporations which have been registered under Article 24 shall be prohibited from rendering the services provided for in Article 2 except as otherwise provided for in other Acts. <Amended by Act No. 6426, Mar. 28, 2001>
 Article 51 (Perusal of Relevant Books, etc.)
Any certified public accountant or accounting corporation may, where deemed necessary for the performance of functions, apply for the perusal of relevant books and documents to the relevant institutions, and the institution to which an application is made shall not refuse the application without good cause.
 Article 52 (Entrustment of Business)
(1) The Financial Services Commission may entrust all or some of business affairs referred to in Articles 7 through 9, 30 (2), 40-4 (1) through (3), 40-5, 40-6, 40-13 (1) and 48 (1) to the Korean Institute of Certified Public Accountants, as prescribed by Presidential Decree. In such cases, when it entrusts business affairs referred to in Article 48 (1), it shall designate a deliberative organ substituting the Certified Public Accountants Disciplinary Committee.
(2) The Financial Services Commission may entrust some of the business affairs concerning examinations as well as all or part of authority referred to in Article 30 (3) to the Governor of the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service"), as prescribed by Presidential Decree. In such cases, when the Governor of the Financial Supervisory Service conducts inspections referred to in Article 30 (3), he/she may collect inspection fees, as prescribed by the Financial Services Commission.
[This Article Wholly Amended by Act No. 10812, Jun. 30, 2011]
CHAPTER VIII-2 IMPOSITION AND COLLECTION OF PENALTY SURCHARGE
 Article 52-2 (Imposition of Penalty Surcharge)
(1) In the case that it has become necessary to take a disposition to suspend the services or the functions of an accounting corporation or a certified public accountant (including a certified pubic accountant affiliated with the accounting corporation) after it or he is found to fall under Article 39 (1) 5 or 48 (1) 2, the Financial Services Commission may, if such disposition to suspend the services and functions is feared to have a serious impact on interested persons, etc. or harm the public interest, impose a penalty surcharge not exceeding 500 million won on such accounting corporation and a penalty surcharge not exceeding 100 million won on such certified public accountant, respectively in lieu of the suspension of the services or the functions. <Amended by Act No. 8863, Feb. 29, 2008>
(2) Where the Financial Services Commission intends to impose a penalty surcharge under paragraph (1), it shall take into account matters falling under each of the following subparagraphs: <Amended by Act No. 8863, Feb. 29, 2008>
1. Nature and extent of the act of violation;
2. Term and frequency of the act of violation;
3. Scale of profits earned by the act of violation.
(3) In the event that a corporation that has violated the provisions of this Act is merged with other corporation, the act of violation shall be deemed committed by a corporation surviving after such merger or a corporation newly incorporated by such merger, on and from which the Financial Services Commission may impose and collect a penalty surcharge. <Amended by Act No. 8863, Feb. 29, 2008>
(4) Necessary matters concerning standards for imposing the penalty surcharge, etc. under the provisions of paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
 Article 52-3 (Raising of Objection)
(1) Any person who is dissatisfied with a disposition to impose a penalty surcharge on him under Article 52-2 may raise an objection to the Financial Services Commission, citing the reasons therefor, within 30 days from the date on which he is notified of such disposition. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The Financial Services Commission shall make a decision with respect to an objection raised under paragraph (1) within 30 days from the date on which such objection is raised: Provided, That where the Financial Services Commission is unable to make such decision within the period of 30 days, it may extend such period within the scope of 30 days. <Amended by Act No. 8863, Feb. 29, 2008>
(3) Any person who is dissatisfied with a decision made under paragraph (2) may seek an administrative abjudication thereon.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
 Article 52-4 (Extension of Period for Paying Penalty Surcharge and Payment of Penalty Surcharge in Installments)
(1) Where any person on which a penalty surcharge is imposed (hereinafter referred to as "person liable for paying the penalty surcharge") is deemed difficult to pay the amount of such penalty surcharge in full on the grounds falling under each of the following subparagraphs, the Financial Services Commission may extend the payment period thereof or allow him to pay such penalty surcharge in installments. In this case, the Financial Services Commission may, when deemed necessary, have him furnish a security: <Amended by Act No. 8863, Feb. 29, 2008>
1. Where he suffers substantial damage on his property due to a natural disaster, etc.;
2. Where he is expected to face substantial difficulties in his financial situation due to his payment of the penalty surcharge in a lump sum;
3. Where other grounds corresponding to subparagraphs 1 or 2 exist.
(2) Where the person liable for paying the penalty surcharge intends to get the time limit for paying his penalty surcharge extended or his penalty surcharge paid in installments under paragraph (1), he shall file an application therefor with the Financial Services Commission by 10 days before the expiration of the time limit for paying his penalty surcharge. <Amended by Act No. 8863, Feb. 29, 2008>
(3) In the event that any person liable for paying the penalty surcharge, whose time limit for paying his penalty surcharge is extended or who is allowed to pay his penalty surcharge in installments, falls under each of the following subparagraphs, the Financial Services Commission may revoke its decision with respect to extending the payment time limit or paying the penalty surcharge in installments, and collect the penalty surcharge in a lump sum: <Amended by Act No. 8863, Feb. 29, 2008>
1. Where he fails to pay his penalty surcharge, the payment of which has been decided to be made in installments, within the payment time limit;
2. Where he changes his security or fails to execute orders given by the Financial Services Commission, which are necessary to preserve such security;
3. Where it is deemed impossible to collect his penalty surcharge, in whole or in part, on the grounds that he is subjected to the commencement of compulsory execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of a corporation or a disposition taken to collect national or local taxes in arrears, etc.;
4. Where other grounds corresponding to subparagraphs 1 through 3 exist.
(4) Necessary matters concerning the extension of the time limit for paying the penalty surcharge, the payment of penalty surcharge in installments or the furnishing of security, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
 Article 52-5 (Collection of Penalty Surcharge and Disposition Taken to Collect Penalty Surcharge in Arrears)
(1) Where any person liable for paying the penalty surcharge fails to pay such penalty surcharge within the payment time limit, the Financial Services Commission may collect additional dues prescribed by Presidential Decree from him for a period starting from the date following the payment time limit to the date preceding the date on which the penalty surcharge in question is paid. <Amended by Act No. 8863, Feb. 29, 2008>
(2) Where any person liable for paying the penalty surcharge fails to pay such penalty surcharge within the payment time limit, the Financial Services Commission shall urge him to pay the penalty surcharge for a fixed period. If he fails to pay the penalty surcharge in question within the fixed period and additional dues referred to in paragraph (1), such penalty surcharge and additional dues may be collected according to the example of a disposition taken to collect national taxes in arrears.
(3) The Financial Services Commission may entrust the responsibility for collecting penalty surcharge and additional dues or taking a disposition to collect penalty surcharge in arrears under paragraphs (1) and (2) to the Commissioner of the National Tax Service.
(4) Necessary matters concerning procedures for collecting penalty surcharge and taking a disposition to collect penalty surcharge in arrear under paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 6426, Mar. 28, 2001]
CHAPTER IX PENALTY PROVISIONS
 Article 53 (Penalty Provisions)
(1) Any of the following certified public accountants (including directors, affiliated certified public accountants and foreign certified public accountants of accounting corporations; hereinafter the same shall apply in this Article) shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 50 million won:
1. A person who has received, demanded or promised to receive money, valuables or benefits in return for unjust solicitations, or has involved in or consulted on the commissioning person's acquisition of unjust financial benefits by fraud or other improper means, in violation of Article 22 (3) (including provisions applicable mutatis mutandis in Article 40-18);
2. A person who has used a fund reserved for indemnifying damage for purposes, other than the purpose of indemnification of damage without obtaining approval from the Financial Services Commission, in violation of Article 28 (2) (including provisions applying mutatis mutandis in Article 40-18).
(2) Any of the following certified public accountants shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won: <Amended by Act No. 13444, Jul. 24, 2015>
1. A person who has concealed truth or made a false report intentionally in violation of Article 15 (3) (including provisions applicable mutatis mutandis in Article 40-18);
2. A person who has divulged confidential matters he/she knew in the course of providing services in violation of Article 20 (including provisions applicable mutatis mutandis in Article 40) or 40-16;
3. A person who has employed certified public accountants registered pursuant to Article 7 (1), in violation of Article 40-10 (1);
4. A person who has provided services referred to in Article 40-3 in joint with or has shared fees or profits earned therefrom with certified public accountants or accounting corporations in violation of Article 40-10 (2);
5. A person who has established or operated an accounting corporation in joint with certified public accountants or accounting corporations by means of the establishment of corporations, equity sharing, entrustment of management or other methods in violation of Article 40-10 (3).
(3) Any of the following certified public accountants shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding ten million won: <Amended by Act No. 13444, Jul. 24, 2015>
1. A person who has audited or attested financial statements in violation of Article 21 (1) and (2) (including provisions applicable mutatis mutandis in Article 33 (2)) or 33 (1);
2. A person who has made another person use his/her name or trade name or has lent his/her registration certificate to another person in violation of Article 22 (1) (including provisions applicable mutatis mutandis in Articles 40 and 40-18);
3. A person subject to the disposition of suspension of practice referred to in Articles 40-17 or 48 who has provided services referred to in Article 2 or 40-3 during the period of suspension of practice.
(4) When an accounting corporation fails to deposit an amount of money equivalent to the fund reserved for the indemnification of damage, in violation of Article 37 (3), the representative director thereof shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding ten million won.
(5) Any person qualified as a certified public accountant or any certified public accountant who has provided services referred to in Articles 2 or 40-3 without registration or renewal of registration referred to in Articles 7 (1) and (4) or 40-4 (1) and (5) shall be punished by a fine not exceeding five million won.
(6) Any person who falls under any of the following subparagraphs as a certified public accountant shall be punished by a fine not exceeding three million won:
1. A person who has established two or more offices in violation of Article 12 (2) (including provisions applicable mutatis mutandis in Article 40-18);
2. A person who has failed to keep records in account books or keep account books in the office in violation of Article 18 (including provisions applicable mutatis mutandis in Article 40);
3. A person who has acquired rights in dispute in violation of Article 22 (2) (including provisions applicable mutatis mutandis in Articles 40 and 40-18);
4. A person who has engaged in competitive business in violation of Article 35 (including provisions applicable mutatis mutandis in Article 40-18).
[This Article Wholly Amended by Act No. 10812, Jun. 30, 2011]
 Article 54 (Penalty Provisions)
(1) Any person who is not a certified public accountant has provided services referred to in Article 2, in violation of Article 50, shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won. <Amended by Act No. 13444, Jul. 24, 2015>
(2) Any person who is not a certified public accountant has fallen under any of the following subparagraphs shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding ten million won: <Amended by Act No. 13444, Jul. 24, 2015>
1. A person who has used the name of certified public accountant, accounting corporation or other names similar thereto in violation of Article 11 or 31 (2) (including provisions applicable mutatis mutandis to Article 40-18);
2. A person who has made public the entire or part of financial statements to the effect that they were audited or attested by certified public accountants or accounting corporations, without undergoing their auditing or attestation;
3. A current or former office worker who has divulged confidential matters he/she knew in the course of conducting duties, in violation of Articles 20 or 40-16.
[This Article Wholly Amended by Act No. 10812, Jun. 30, 2011]
 Article 55 (Confiscation, Collection in Addition, etc.)
Any money and valuables or other benefits received by a person who commits an offense provided for in Articles 53 (1) 1 and (3) 2 or by a third person who knows about such circumstance shall be confiscated. Where confiscation is not possible, the value equivalent thereto shall be collected.
[This Article Newly Inserted by Act No. 15411, Feb. 21, 2018]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on March 1, 1997.
Article 2 (Transitional Measures relating to CPA Examinations)
(1) Any person who passed the first examination administered in 1996 shall be deemed to have passed the first examination provided for in this Act.
(2) Matters related to the recognition of qualification or training of certified public accountant, etc. for a person who passed the second examination administered prior to 1988, shall be prescribed by Presidential Decree.
Article 3 (Transitional Measures relating to Qualification for Certified Public Accountant)
(1) When this Act enters into force, a person who is qualified as a certified public accountant by the previous provisions, shall be deemed to have been qualified as a certified public accountant pursuant to this Act.
(2) When this Act enters into force, training under the previous provisions shall be deemed to be such under this Act.
Article 4 (Transitional Measures relating to Registration, Approval, Filing of Reports, etc.)
When this Act enters into force, filings of reports on registration of a certified public accountant and cancellation thereof, opening, suspension, and cessation of businesses, and relocation of offices pursuant to the previous provisions of this Act shall be deemed to have been made in accordance with this Act.
Article 5 (Transitional Measures relating to Establishment, etc. of Ac- counting Corporation)
(1) At the time when this Act enters into force, an accounting corpora- tion shall be deemed to be such by the previous provisions, until it satisfies requirements set forth in the amended provisions of Articles 24 through 26, and 27 (1): Provided, That an accounting corporation at the time of implementation of this Act fails to satisfy requirements set forth in Articles 24 through 26 and 27 (1), by December 31, 1997, its estab- lishment approval shall be canceled.
(2) With respect of services rendered by an accounting corporation existing at the time of implementation of this Act before the enforcement date of this Act or before it satisfies requirements set forth in the amended provisions of Articles 24 through 26 and 27 (1), the previous provisions of Article 12-17 shall apply.
(3) Where an accounting corporation is to be established on December 31, 1997 after this Act takes effect, it may be established with the total number of directors and member accountants not exceeding 10 people and capital of not less than 500 million won. <Amended by Act No. 6107, Jan. 12, 2000; Act No. 6426, Mar. 28, 2001>
Article 6 (Transitional Measures relating to Members)
(1) When this Act enters into force, members of an accounting corporation shall be deemed to be its directors under this Act.
(2) When this Act enters into force, a person who is or used to be a member of an accounting corporation shall be deemed to be its director under this Act, with regard to the application of the amended provisions of Article 26 (1) 3.
Article 7 (Transitional Measures relating to Joint Accounting Office)
(1) Any joint accounting office which was registered prior to the entry into force of this Act shall be deemed to have its registration canceled on December 31, 1997.
(2) When this Act enters into force, a joint accounting office under the previous provisions, may perform functions entrusted prior to the entry into force of this Act in its name or title of joint accounting office: Provided, That functions under Article 2 shall not be newly entrusted after the entry into force of this Act.
Article 8 (Transitional Measures relating to Association)
When this Act enters into force, the Certified Public Accountants Association, under the previous provisions, shall be deemed to be the Korean Institute of Certified Public Accountants in accordance with this Act.
Article 9 (Transitional Measures relating to Application of Penalty Provisions)
In the case of applying the penalty provisions with regard to activities prior to the entry into force of this Act, the previous provisions shall apply.
Article 10 (Relation with Other Statutes)
When this Act enters into force, references to the previous Certified Public Accountant Act or previous provisions thereof in other statutes where there are relevant provisions in this Act, shall be construed to include either this Act or such relevant provisions of this Act as replacing the previous provisions.
ADDENDA<Act No. 5453, Dec. 13, 1997>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA<Act No. 5505, Jan. 13, 1998>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
(2) (Transitional Measures relating to Dispositions) At the time of the entry into force of this Act, authorization or other actions taken by administrative agencies, or various reports or other actions submitted to administrative agencies under the previous provisions, shall be deemed to be actions taken by or submitted to administrative agencies under this Act.
(3) through (5) Omitted.
ADDENDA<Act No. 5815, Feb. 5, 1999>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
(2) (Transitional Measures on Penal Provisions) In applying the penal provisions to acts committed prior to the entry into force of this Act, the previous provisions shall apply.
ADDENDUM<Act No. 6107, Jan. 12, 2000>
This Act shall enter into force on April 1, 2000: Provided, That the amended provisions of the proviso of Article 5 (3) of the Addenda of the Amendment to the Certified Public Accountant Act (Act No. 5255) shall enter into force on the date of its promulgation.
ADDENDA <Act No. 6426, Mar. 28, 2001>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2001: Provided, That the amended provisons of Articles 10, 17 and 38, and the amended provisions of the Addenda of the Certified Public Accountants Act (Act No. 5255) shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Grounds for Disqualification)
In the event that any person falls under the grounds for disqualification under the amended provisions of Article 4 due to the grounds that accrued prior to the enforcement of this Act, he shall be governed by the previous provisions notwithstanding the amended provisions of the same Article.
Article 3 (Transitional Measures concerning Previous Accounting Corporation)
Any accounting corporation that is set up upon the authorization of the Minister of Finance and Economy under the previous provisions at the time when this Act enters into force shall be deemed registered under the amended provisions of Article 24 (1).
Article 4 (Transitional Measures concerning Application of Penalty Provisions)
The application of the penalty provisions to any act committed prior to the enforcement of this Act shall be governed by the previous provisions.
ADDENDA <Act No. 6994, Dec. 11, 2003>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 21 (1) shall enter into force on January 1, 2004 and the amended provisions of Article 5 (3) through (5) shall enter into force on January 1, 2007, respectively.
(2) (Applicability concerning Disposition Taken to Suspend Part of Business of Certified Public Accountant) The amended provisions of Article 26 (1) 2 shall apply, starting with the case where any certificated public accountant is subject to a disposition taken to suspend part of his business after the enforcement of this Act.
ADDENDA <Act No. 7619, Jul. 29, 2005>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Applicability concerning Cancellation, etc. of Registration of Accounting Corporation) The amended provisions of Article 40 (1) shall apply starting with the portion of the causes, such as the cancellation of registration, occurring for the first time after the enforcement of this Act.
ADDENDA<Act No. 7796, Dec. 29, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2006
Articles 2 through 6 Omitted.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10303, May 17, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDUM <Act No. 10812, Jun. 30, 2011>
This Act shall enter into force on the date on which the Free Trade Agreement between the Republic of Korea and the European Union and its Member States takes effect: Provided, That the amended provisions of Articles 23 (2) 4, 26 (5) and 40-12 shall enter into force five years after the date on which the Free Trade Agreement between the Republic of Korea and the European Union and its Member States takes effect.
ADDENDA <Act No. 10866, Jul, 21, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That...(Omitted)...Article 3 of Addenda shall enter into force one year after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 13444, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Exemption from Part of Examinations)
The amended provisions of Article 6 (3) shall apply, beginning from the first person dismissed or discharged or the first person subject to disciplinary action equivalent to a demotion or suspension of work.
ADDENDUM <Act No. 14119, Mar. 29, 2016>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 14815, Apr. 18, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Grounds for Disqualification of Incompetent Persons, etc.)
Persons under adult guardianship, or under limited guardianship under the amended provisions of subparagraph 1 of Article 4 shall be deemed to include persons who have been declared and are currently incompetent or quasi-incompetent under Article 2 of the Addenda to the partially-amended Civil Act (Act No. 10429).
ADDENDA <Act No. 15017, Oct. 31, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after its promulgation.
Article 2 (Applicability to Requests for Perusal and Reproduction of Information on Measures or Disciplinary Actions)
The amended provisions of Article 48-2 shall also apply to requests for perusal and reproduction of information on measures or disciplinary actions taken before this Act enters into force.
ADDENDUM <Act No. 15411, Feb. 21, 2018>
This Act shall enter into force on the date of its promulgation.