Open Decision Ledger · Corporate law & governance
Determination of False Statements in an External Auditor's Audit Report and Whether Criminal Liability under the Dual Punishment Provision Is Successor to a Surviving Corporation upon Merger
Translated from the Korean original. Read the Korean
Supreme Court, Aug. 23, 2007, 2005Do4471 (judgment)
Case name: 주식회사의외부감사에관한법률위반
Official text on the National Law Information Center
Question
Does the criminal liability that an accounting firm, extinguished through an absorption merger, bore under the dual punishment provision for its certified public accountant's violation of the Act on External Audit of Stock Companies pass to the corporation surviving the merger?
Holding
Because the punishment of a corporation under the dual punishment provision is a criminal penalty, differing in nature from administrative sanctions or civil liability, and because Article 328 of the Criminal Procedure Act also provides for dismissal of prosecution when a corporation ceases to exist, that criminal liability is not transferable in its nature and does not pass to the surviving corporation. The Supreme Court further held that entering only an unqualified opinion while knowing of the distortion in the balance carried forward from the previous year constitutes a false statement, and dismissed the final appeals of both the certified public accountant and the prosecution.
Summary of the holding, verbatim
합병으로 인하여 소멸한 법인이 그 종업원 등의 위법행위에 대해 양벌규정에 따라 부담하던 형사책임은 그 성질상 이전을 허용하지 않는 것으로서 합병으로 인하여 존속하는 법인에 승계되지 않는다.
Unofficial English translation
Criminal liability that a corporation extinguished by merger had borne under a dual punishment provision for the unlawful acts of its employees and others is, by its nature, of a kind that does not permit transfer, and is not succeeded to by the corporation surviving the merger.
Disposition
Dismissed Stated in the decision
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Form of the test
Elements stated Stated in the decision
자신의 인식판단이 감사보고서에 기재된 내용과 불일치하는 것임을 알고서도 일부러 내용이 진실 아닌 기재를 한 때를 말한다.
Unofficial English translation
It refers to a case in which, knowing that one's own recognition and judgment is inconsistent with the content entered in the audit report, one deliberately makes an entry whose content is untrue.
Factors
- 사물의 성질상 그와 상당한 관련성이 있는 간접사실을 증명하는 방법
- 당해연도 대차대조표의 전기이월잔액에 왜곡이 있다는 사실을 인식하였다면
- 그러한 조치 없이 감사보고서에 ‘적정의견’이라고만 기재한 것
- 양벌규정에 의한 법인의 처벌은 어디까지나 형벌의 일종으로서 행정적 제재처분이나 민사상 불법행위책임과는 성격을 달리하는 점
Unofficial English translation
• A method of proving indirect facts that, by the nature of things, have a considerable relevance thereto
• If one recognized that the brought-forward balance from the preceding fiscal year in the balance sheet for the year in question was distorted
• Having entered only an "appropriate opinion" in the audit report without taking such measures
• The point that the punishment of a corporation under a dual punishment provision is no more than a type of criminal penalty, and thus differs in nature from an administrative sanction or civil tort liability
Relation to precedent
States a new standard Read from the decision
합병으로 소멸한 법인이 양벌규정에 따라 부담하던 형사책임이 합병 후 존속회사에 승계되는지 여부(소극)
Unofficial English translation
Whether criminal liability that a corporation extinguished by merger had borne under a dual punishment provision is succeeded to by the surviving corporation after the merger (negative)
Decisions referred to
[1] 헌법재판소 2004. 1. 29. 선고 2002헌가20, 21 전원재판부 결정(헌공89, 211) / [3] 대법원 2004. 7. 8. 선고 2002두1946 판결(공2004하, 1342)
Burden of proof
The prosecution Read from the decision
그 기재의 허위성 및 허위 기재의 고의는 사물의 성질상 그와 상당한 관련성이 있는 간접사실을 증명하는 방법에 의하여 이를 증명할 수밖에 없고
Unofficial English translation
The falsity of that entry and the intent to make the false entry cannot but be proved by a method of proving indirect facts that, by the nature of things, have a considerable relevance thereto, and
Open question and revisit condition
Even where a merger was carried out after the unlawful act for the purpose of avoiding criminal liability, may the surviving corporation not be punished under the dual punishment provision?
If legislation is enacted concerning the provisions punishing false statements under the Act on External Audit of Stock Companies, the dual punishment provision, or the succession of criminal liability upon a corporation's merger, this reading will be re-examined.
Cross-family AI independent reading & axis check
5 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
Compared with an independent reading by another AI (GPT-6 Astra), which read only the original text without seeing the primary reading, 5 of the 8 axes matched, and the readings diverged on Axis 6 (Relation to precedent), Axis 7 (Burden of proof), and Axis 8 (Open question and revisit condition).
Axis 6 (Relation to precedent): Primary “States a new standard” vs Independent “Follows earlier decisions”
Because the original text states a legal principle without making the relation to precedent explicit, the primary reading may weight the establishment of a standard, while the independent reading may weight the reconfirmation of a general legal principle.
대법원 2004. 7. 8. 선고 2002두1946 판결(공2004하, 1342)Axis 7 (Burden of proof): Primary “The prosecution” vs Independent “Not addressed”
Because the original text explains the method of proving falsity and intent without expressly identifying who bears the proof, the primary reading may assume the prosecution's role in a criminal case, while the independent reading may attend to whether there is any express mention.
그 기재의 허위성 및 허위 기재의 고의는 사물의 성질상 그와 상당한 관련성이 있는 간접사실을 증명하는 방법에 의하여 이를 증명할 수밖에 없고Axis 8 (Open question and revisit condition): Primary “Even where a merger was carried out after the unlawful act for the purpose of avoiding criminal liability, may the surviving corporation not be punished under the dual punishment provision?” vs Independent “Where an external auditor set out part of the distortion in the audit report while maintaining an unqualified opinion, to what extent must the statement be made and reflected in the opinion to avoid a false statement?”
The primary reading asks whether succession of liability is denied even for a merger undertaken for the purpose of evading criminal liability, while the independent reading asks the degree of statement of the distortion and reflection in the opinion required to avoid a false statement.
합병으로 인하여 소멸한 법인이 그 종업원 등의 위법행위에 대해 양벌규정에 따라 부담하던 형사책임은 그 성질상 이전을 허용하지 않는 것으로서 합병으로 인하여 존속하는 법인에 승계되지 않는다.Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below (Seoul Central District Court, 2004No1987) held that, among assets under construction totaling 179.6 billion won as verified as of June 30, 1998, 119.7 billion won was found to be overstated, that Defendant 1 himself pointed out the overstatement of 57.8 billion won in the year-end balance, and that, given that he knew of the company's attempt at window-dressing its accounts, entering an unqualified opinion without any additional audit of the balance carried forward from the previous year was a false statement and reflected at least dolus eventualis (conditional intent). It also held that, because Non-indicted 2 accounting firm was absorbed and merged into Defendant 2 accounting firm on May 10, 1999, Defendant 2 accounting firm bears no criminal liability, and therefore upheld the not guilty determination of the court of first instance.
Supreme Court standard: The Supreme Court found the court below's finding of guilt persuasive in light of the legal principle that falsity and intent can only be proved by circumstantial facts having substantial relevance, and the legal principle that an unqualified opinion that fails to reflect in the audit report the distortion of the balance carried forward from the previous year is a false statement. Clarifying the legal principle that criminal liability under the dual punishment provision does not pass to the surviving corporation by virtue of a merger, the Supreme Court also held that the not guilty determination as to Defendant 2 accounting firm was proper, and dismissed the final appeals of Defendant 1 and the prosecution.
Distinguishing conditions
- Where the external auditor did not recognize the possibility of distortion and there are no circumstantial facts from which such recognition can be inferred
- Where a qualified opinion or a disclaimer of opinion was expressed on the ground of a limitation on the scope of the audit, thereby reflecting the distortion in the statement of the opinion
- Where the corporation that committed the unlawful act continues to exist as such and is not extinguished by a merger or otherwise
Record verification notes
Before asserting the same conclusion, it needs to be checked when and in what manner the corporation to which the unlawful act is attributed ceased to exist, and whether there are circumstances in which employees of the surviving corporation themselves separately committed an unlawful act.
From the official text
Points at issue
[1] 구 주식회사의 외부감사에 관한 법률 제20조 제1항 제2호의 ‘감사보고서에 허위의 기재를 한 때’의 의미 및 외부감사인이 감사보고서 기재의 허위성과 그에 대한 고의를 부인하는 경우 이를 증명하는 방법 [2] 외부감사인이 재무제표 감사 결과 분식회계로 인한 왜곡이 있음을 인식하고도 다른 조치 없이 감사보고서에 ‘적정의견’이라고만 기재한 경우, 구 주식회사의 외부감사에 관한 법률 제20조 제1항 제2호의 ‘허위의 기재’에 해당하는지 여부(적극) [3] 합병으로 소멸한 법인이 양벌규정에 따라 부담하던 형사책임이 합병 후 존속회사에 승계되는지 여부(소극)
Unofficial English translation
[1] The meaning of the phrase "making a false entry in an audit report" in Article 20 (1) 2 of the former Act on External Audit of Stock Companies, and the method of proving it where an external auditor denies the falsity of the entries in the audit report and the intent [2] Whether, where an external auditor, aware that the results of the audit of the financial statements contained distortions caused by window dressing, nevertheless entered only an "appropriate opinion" in the audit report without taking any other measures, this constitutes a "false entry" within the meaning of Article 20 (1) 2 of the former Act on External Audit of Stock Companies (affirmative) [3] Whether criminal liability that a corporation extinguished by merger had borne under a dual punishment provision is succeeded to by the surviving corporation after the merger (negative)
Summary of the holding
[1] 구 주식회사의 외부감사에 관한 법률(2001. 3. 28. 법률 제6427호로 개정되기 전의 것) 제20조 제1항 제2호의 ‘감사보고서에 허위의 기재를 한 때’라고 함은 행위자인 외부감사인이 감사보고서의 내용에 자신이 감사한 사실에 관한 인식이나 판단의 결과를 표현함에 있어서 자신의 인식판단이 감사보고서에 기재된 내용과 불일치하는 것임을 알고서도 일부러 내용이 진실 아닌 기재를 한 때를 말한다. 그런데 외부감사인이 감사보고서에 기재된 자신의 인식이나 판단은 진실에 부합하므로 허위가 아니며, 설령 그렇지 않다 하더라도 자신은 그것이 허위라는 점을 몰랐다고 주장하는 경우, 그 기재의 허위성 및 허위 기재의 고의는 사물의 성질상 그와 상당한 관련성이 있는 간접사실을 증명하는 방법에 의하여 이를 증명할 수밖에 없고, 이때 무엇이 상당한 관련성이 있는 간접사실에 해당할 것인가는 정상적인 경험칙에 바탕을 두고 치밀한 관찰력이나 분석력에 의하여 사실의 연결상태를 합리적으로 판단하는 방법에 의하여야 한다. [2] 주식회사의 재무제표에 대하여 회계감사를 실시하는 외부감사인으로서는 감사 결과 종전 회계연도의 분식회계로 인하여 당해연도 대차대조표의 전기이월잔액에 왜곡이 있다는 사실을 인식하였다면 그와 같은 왜곡을 당해연도의 감사보고서에 적절히 지적하고 의견기재에 반영하여야 한다고 봄이 상당하므로, 그러한 조치 없이 감사보고서에 ‘적정의견’이라고만 기재한 것은 구 주식회사의 외부감사에 관한 법률(2001. 3. 28. 법률 제6427호로 개정되기 전의 것) 제20조 제1항 제2호의 ‘허위의 기재’에 해당한다. [3] 회사합병이 있는 경우 피합병회사의 권리·의무는 사법상의 관계나 공법상의 관계를 불문하고 모두 합병으로 인하여 존속하는 회사에 승계되는 것이 원칙이지만, 그 성질상 이전을 허용하지 않는 것은 승계의 대상에서 제외되어야 할 것인바, 양벌규정에 의한 법인의 처벌은 어디까지나 형벌의 일종으로서 행정적 제재처분이나 민사상 불법행위책임과는 성격을 달리하는 점, 형사소송법 제328조가 ‘피고인인 법인이 존속하지 아니하게 되었을 때’를 공소기각결정의 사유로 규정하고 있는 것은 형사책임이 승계되지 않음을 전제로 한 것이라고 볼 수 있는 점 등에 비추어 보면, 합병으로 인하여 소멸한 법인이 그 종업원 등의 위법행위에 대해 양벌규정에 따라 부담하던 형사책임은 그 성질상 이전을 허용하지 않는 것으로서 합병으로 인하여 존속하는 법인에 승계되지 않는다.
Order
상고를 모두 기각한다.
Unofficial English translation
All appeals are dismissed.
Provisions referred to
[1] 구 주식회사의 외부감사에 관한 법률(2001. 3. 28. 법률 제6427호로 개정되기 전의 것) 제20조 제1항 제2호(현행 제20조 제2항 제2호 참조) [2] 구 주식회사의 외부감사에 관한 법률(2001. 3. 28. 법률 제6427호로 개정되기 전의 것) 제20조 제1항 제2호(현행 제20조 제2항 제2호 참조) [3] 구 주식회사의 외부감사에 관한 법률(2001. 3. 28. 법률 제6427호로 개정되기 전의 것) 제21조, 형사소송법 제328조, 공인회계사법 제37조 제1항 제3호
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
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