The History And Evolution Of Korean Accounting Standards

Abstract

This study discusses how Korean accounting standards have evolved and how they have increasingly influenced both the domestic economy and the international accounting environment. The paper argues that Korean accounting standards have significant implications for Korean economic growth, globalization, and integration with International Financial Reporting Standards (IFRS). The paper traces their historical development from an initial ad hoc response to industrialization through adoption of IFRS. IFRS has increased transparency and drastically improved financial reporting quality and the basis for market valuation. The changes promoted by IFRS have helped Korean firms be more competitive and signaled to international capital markets that they can be more comfortably be trusted. The paper then outlines future challenges and opportunities such as integrating Environmental, Social, and Governance (ESG) factors with traditional accounting data and using IT to create much more efficient and responsive accounting that is useful for both management and financial statement users. The paper concludes with comments on how Korean accounting regulators such that increased convergence with IFRS, and ultimately global accounting harmonization would make Korea’s financial markets larger and liquid allowing them to take their place on the world stage.