Two years ago, an internal embezzlement incident worth 200 billion won at Company ○ caused a big stir in Korean society. As shocking as the astronomical amount of embezzlement was the fact that embezzlement and other corruption incidents occur in a variety of industries and departments, from manufacturing and service industries to the financial industry. Now, even companies that are trusted to have good internal controls are being caught up in embezzlement cases. This is because the company's internal control system, which prevents and detects corruption such as embezzlement, did not actually work.

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At the end of last year, the Financial Supervisory Service legislated the internal accounting management system, which had been established and operated as a voluntary regulation, into the 'Internal Accounting Management System Evaluation and Reporting Standards'. According to this standard, which has been in effect since January of this year, the CEO must report to the audit (committee), board of directors, and general shareholders' meeting every year the company's core internal control activities to respond to the risk of financial fraud, such as embezzlement, in a prescribed form. In addition, the audit (committee) must consult face-to-face with management every year regarding fund-related fraud risks and additionally disclose details of communication with external auditors in the evaluation report. This is a warning from the supervisory authorities to no longer engage in formal governance activities that end with reporting.