Financial authorities are discussing a plan to increase the budget for rewards paid to internal whistleblowers who report corporations’ accounting fraud. The cap on rewards paid to informants has risen from 1 billion won to 2 billion won, but the budget secured for paying rewards is only 400 million won. The authorities aim to bring the related budget in line with reality.
According to financial authorities on the 1st, a plan to increase the reward budget for accounting fraud reports is under review for next year’s budget bill. A certain percentage of rewards is paid to those who report corporations’ accounting violations based on the scale of the violation and the informant’s contribution, but the surge in the number of reports and the size of rewards has pushed the budget to its limit.
The accounting fraud reporting system was introduced in 2019. It is intended to detect accounting fraud early through tips from corporate insiders and to protect informants. Since its implementation, as cases of detecting accounting violations based on internal corporate information have increased, the system’s effectiveness has been confirmed, but the budget has been flagged as failing to keep pace with the system’s expansion.
In fact, as the accounting fraud reporting system has quickly taken root, the number of reports and reward payments has risen sharply. The number of reports, which was 125 in 2021, increased to 130 in 2022 and 141 in 2023, and last year 179 reports were filed.
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