How should foreign-invested companies prepare for external audits in Korea?

For foreign-invested companies operating in Korea, preparing for an external audit requires more than simply relying on the global reporting package prepared for the headquarters.  In addition to basic closing data, companies must prepare the financial statements in the DART disclosure format, including the Cash Flow Statement (CF), Statement of Changes in Equity, and detailed footnotes in accordance with local disclosure requirements. Supporting schedules and sufficient documentation must also be aligned with Korean statutory audit standards.

In practice, one of the most common challenges for foreign-invested companies is preparing financial statements in the Korean disclosure format. In particular, drafting the cash flow statement and footnotes often requires more time and resources than initially expected.

In addition, audit procedures such as bank confirmations and AR/AP account confirmations can be challenging in practice, especially for companies with limited experience communicating with financial institutions or local stakeholders.

Under the Korean external audit framework, the responsibility for preparing financial statements rests entirely with the company. Post-filing regulatory reviews are also relatively strict. Therefore, foreign-invested companies may face unexpected difficulties if they are not prepared in advance.

In this environment, engaging a PA (Private Accountant) service can be a practical solution.

Forvis Mazars provides practical, hands-on support tailored to foreign-invested companies through its PA services. Beyond basic closing support, we help reduce communication burdens with auditors, minimize trial and error, and ensure stable timelines and quality, even for first-time statutory audits in Korea.

*For more information on auditor appointment procedures, please refer to our previous blog post: Criteria and engagement procedures for first year external audit