[Opinion] Unqualified Auditors

Luxury cars with chauffeurs, roomy office and private secretaries, more than 100 million won annual salaries and abundant expenses… Even though they rank number 2 in a company, they don’t have responsibility for business performance. Nobody can’t interfere them. “They” are “auditors in public corporations.” Average people can’t even think about being in the position. However some people, who sided with the current administration during the presidential election but who are not qualified for auditor position, are enjoying such “happy” positions. Some of them have a history of student demonstration activities.

According to the findings by Grand National Party lawmaker Jeong Jin-sub, 41 out of 69 auditors of government-owned corporations received more than 100 million won as an annual salary, and the highest salaried auditor was an auditor in Korea Development Bank; 485.4 million won. The average salary of auditors in public corporations has increased by 78 percent since 2000; it is 2.6 times the average salary increase of common public officials and 1.8 times that of corporate workers. Roh administration appointed 325 directors to public corporations and 88 out of them are auditors. According to a report made by the Ministry of Planning and Budget, companies with more revolving door appointments showed worse business performances in the survey of 14 public enterprises.

Of course, the role of auditors is important. There are many auditing works in every corporation: legal issues conducted by directors and management, soundness and feasibility audits about financial activities, evaluations of audits conducted by accounting firms. This means auditors should have in-depth expertise and ethical integrity. However, it may happen that those auditors don’t even understand basic balance sheet and income statements.

President Roh said to some newspaper executives last month, “Top management of public corporations has not followed government orders. The reason that I appoint external auditors to those companies is to control management.” Whose interest should be the concern of the management of the public corporations? Contributing to national economy by maximizing a firm’s competitiveness and reducing people’s tax burden is their responsibility. Do the auditors appointed thanks to the same code with the president help do so or hinder it from doing so?

Gwon Sun-taek, Editorial Writer, maypole@donga.com