[1] The purport of Article 21(2)4 of the Certified Public Accountant Act, and Article 14(2) of the Enforcement Decree of the Certified Public Accountant Act prohibiting a certified public accountant from conducting a due diligence, etc. to sell the company’s assets, etc. during the period in which the certified public accountant enters into a contract to audit

[2] In a case where a certified public accountant outside the accounting auditor Gap corporation, was indicted for violating the Certified Public Accountant Act by having the seller Gap's assets, etc. who had conflicts of interest, during the course of trading Gap's stocks and management rights, and was charged with violation of the Certified Public Accountant Act, the case affirming the judgment below which found the defendant not guilty on the ground that the defendant's presentation of Gap's opinion on the purchase of Gap's company to Eul upon Eul's request was not prohibited by the Certified Public Accountant Act

[1] Article 21(2)4 of the Certified Public Accountant Act and Article 14(2) of the Enforcement Decree of the Certified Public Accountant Act prohibit a certified public accountant from performing the business of actual inspection, financial reporting, value assessment of the company's assets, capital and other rights to sell all or part of the company's assets, and presenting his opinion on the validity of the transaction or contract to the company during the period in which the certified public accountant enters into a contract to audit or verify the financial statements of the company. The purpose of this prohibition is to restrict the performance of such business as above, since the certified public accountant's business is likely to undermine the fairness and independence of auditing if the certified public accountant performs the business of actual inspection to sell the company'

[2] In a case where the Defendant, an external accounting auditor of Gap corporation, was indicted for violation of the Certified Public Accountant Act on the ground that he had conducted a real-time inspection on Gap's company's assets, etc. during the course of trading Gap's stocks and management rights to the buyer, the case affirming the judgment below which found the Defendant not guilty on the ground that the evidence submitted by the prosecutor alone was insufficient to acknowledge that the Defendant conducted a real-time inspection on the sale of Gap's company's assets, etc., and that the Defendant prepared a draft "report on the actual-time inspection on Gap's assets and liabilities" at Eul's request and presented his opinion on Eul's purchase was not prohibited under Article 21(2)4 of the Certified Public Accountant Act

[1] Article 21(2)4 of the Certified Public Accountant Act; Article 14(2) of the Enforcement Decree of the Certified Public Accountant Act / [2] Article 21(2)4 of the Certified Public Accountant Act; Article 53(3)1 of the former Certified Public Accountant Act (Amended by Act No. 10812, Jun. 30, 201); Article 14(2) of the Enforcement Decree of the Certified Public Accountant Act; Article 325 of the Criminal Procedure Act

Defendant

Prosecutor

Seoul Central District Court Decision 2011No1316 decided June 24, 2011

The appeal is dismissed.

The grounds of appeal are examined.

Article 21(2)4 of the Certified Public Accountant Act and Article 14(2) of the Enforcement Decree of the same Act prohibit a certified public accountant from performing the business of actual inspection, financial reporting, value assessment, and sale, transaction, or presentation of opinion on the assets, etc. to sell all or some of the company's assets, capital, and other rights to the company during the period in which the certified public accountant enters into a contract to audit or verify the financial statements of a specific company. This is the purpose of restricting the performance of such business as above, since a certified public accountant is likely to impair the fairness and independence of audit if the certified public accountant performs the business of actual inspection, etc. to sell the company's assets, etc.

The court below held that the evidence submitted by the prosecutor alone is insufficient to recognize the fact that the defendant, who served as an external accounting auditor of the non-indicted 1 corporation, was engaged in the duty of due diligence to sell the assets, etc. of the non-indicted 1 corporation, and rather, it can be acknowledged that the defendant prepared a draft of due diligence report at the request of the purchaser of the non-indicted 1 corporation 2 and presented his opinion on the purchase of the non-indicted 1 corporation to the non-indicted 2. The court below

In light of the purport of Article 21(2)4 of the Certified Public Accountant Act and the record, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors of exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or of misapprehending the legal principles as to acts prohibited by Article 14(2)4 of the

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young (Presiding Justice)