Accounting information serves as society's public ledger, showing where and how limited resources are being utilized. The more accurately this information is disclosed, the more efficiently resources are allocated and the healthier organizational growth becomes. This is why not only for-profit corporations but also non-profit organizations and public institutions produce accounting information for their stakeholders. However, since each organization's founding purpose and stakeholder interests differ, the format of financial statements and disclosure levels inevitably vary. Investors, for instance, want to verify profitability and financial soundness, while donors and citizens seek to confirm whether funds were used for their intended purposes.
Nevertheless, the basic framework for producing and providing accounting information—comprising four pillars: production of accounting information, external audits, disclosure, and supervision and regulation—should function uniformly across all organizations. Any organization handling funds should prepare financial statements and operating results through settlement after the fiscal year ends, and verify through external audits whether the results correspond to facts. Verified accounting information must be provided to stakeholders in a timely manner, and the competent authorities must manage and supervise this entire process in an integrated fashion.
The problem is that Korea's current system fails to support these principles. With accounting standards, audit systems, and disclosure and supervision frameworks varying across sectors—corporations, public institutions, and non-profit organizations—systematic and consistent regulation is not being achieved. Some areas have unclear applicable accounting standards, and external audits are not mandatory in some cases despite the presence of numerous stakeholders.
With multiple ministries and agencies sharing similar supervisory functions, work overlaps and financial statement terminology and reporting formats differ, causing significant confusion for information users. These institutional gaps lead to blind spots in accounting information, increasing the risk of fraud and inefficiency. Critics continuously point out that the absence of a control tower to coordinate accounting makes it difficult to consistently establish and execute national accounting policies.
The solution to these structural problems is the enactment of a Basic Accounting Law. This law would serve as general legislation for the accounting field, stipulating basic principles commonly applicable to the production and provision of accounting information regardless of organizational form. The idea is to consolidate core standards regarding financial statement preparation and disclosure, internal controls and external audits, and supervision and sanctions within a single law and apply them consistently to all organizations.
This is expected to reduce accounting blind spots, enhance the usefulness and reliability of accounting information, and alleviate duplication and confusion in system operations to achieve unified accounting policies. In the long term, it could also raise the level of accounting infrastructure across both public and private sectors.
Of course, as a new law is being created, detailed regulations considering each organization's characteristics and sufficient social discussion must follow. However, for a transparent society and sustainable economy, accounting blind spots can no longer be left unaddressed. Now is the time to establish the foundation of the accounting system through the enactment of a Basic Accounting Law and ensure all organizations operate on a trusted accounting basis. If the government, National Assembly, experts, and civil society join forces to develop an effective Basic Accounting Law, the transparency and soundness of Korea's economy will be further enhanced.
