사외이사와 외부감사인의 법적 책임: 코어비트 사례

In this paper, we study the Corebit case in order to examine the legal liabilities of (independent) outside directors and external auditors when Corebit was delisted due to its accounting failure and accordingly investors sued the Corebit management and external auditor for their losses. Corebit management overstated its equity and understated its liabilities in 2009. For example, Corebit executives and directors purchased 550,000 shares of an unlisted company for 1,760 million KRW, but recorded at 11,000 million KRW. Corebit was accused of the accounting fraud by the prosecutor and delisted from KOSDAQ on February 2010. Subsequently, investors sued all the executives including outside directors and its external auditor-Samil PricewaterhouseCoopers. Appeals from decisions of the Trial Court went to the High Court and eventually the Supreme Court. The final judgment was that one outside director was liable for negligence as a good manager and its outside auditor was not liable due to its due diligence with good faith. Given that this verdict is viewed as unusual, it is worthwhile to take a close look at the case. According to the Act on External Audit of Stock Companies, CEO and CFO are responsible for the preparation for financial statements. Outside directors provide outside perspective and professional experience for a company. They keep monitoring on the process the company is run and the inside directors. Conflicts among stakeholders such as inside directors and shareholders can often be handled by the outside directors because they are considered to be relatively objective and have little risk of the conflict of interest. On the other hand, outside directors may lack background knowledge of the specific issues connected to the company's operation. For this reason, in general, outside directors have been exempt from the legal liability for the accounting fraud committed by managing executives unless there was evidence that the outside directors are knowingly involved in the fraudulent activity. Independent external auditors conduct external audits in order to enhance the reliability of financial statements, enabling users of the financial statements make better decisions based on the accounting information in the audited financial statements. Even though auditors are not required to prevent frauds and errors, they can give positive effects on preventing frauds and errors by discouraging the occurrence. External auditors are required to plan and perform the audits with the professional skepticism, making the auditors find conditions or events that suggest the existence of frauds or errors in the financial statements. In addition, the auditors are required to perform the audit risk assessment and develop audit programs by which reasonable assurance on the financial statements can be obtained. With the procedures, external auditors could discover the frauds or errors that have a significant impact on the financial statements. Nevertheless, the auditors who plan well and do the audits properly have unavoidable risks that significant frauds or errors are not detected. The Trial Court and the High Court had disagreement on the legal liability of independent directors. The final decree of the Supreme Court declared guilty. This decision is viewed as the case that Mr. Yoon, an outside director, was responsible for the due diligence with good faith as a good manager in supervising and monitoring top executives’ managerial decisions. Investors also claimed that the external auditor should be liable for not being able to detect material issues to be reflected in the auditor’s report and that they suffer financial losses due to the auditor wrongdoing. In addition, the Securities and Future Commission ex post take punitive actions against the auditor for the inappropriate audit procedures. However, the Court ruled that the external auditor was not guilty by conducting due diligence with good faith even though the auditor could not find accounting malpractices committed by the management. To mitigate the likelihood of accounting malpractices, we make the following recommendations. First, managers should be heavily penalized for the wrong doing in order to discourage them from committing accounting fraud. Second, the current four-year cycle of supervisory reviews should be shortened. Third, the audit committee with independent qualified members should play an active role in preventing accounting fraud. Fourth, top management should be responsible for maintaining the effective operation of internal control over financial reporting. This case should be useful for investors, auditors, regulators, and academicians in understanding the legal liabilities of outside directors and external auditors.