South Korea’s Financial Supervisory Service (FSS) announced on Sunday that it would intensify its audit of order-based industries, including the construction and shipbuilding industries, amid rising concerns over non-performing loans in real estate project financing and prevalent accounting malpractices. The FSS plans to target practices like overstating project progress and omitting key financial data to falsely appear more profitable amid high interest rates, inflation and rising raw material costs.

The FSS has emphasized the need for businesses and external auditors to thoroughly assess and accurately report financial realities, promptly accounting for rising construction costs and re-evaluating the recoverability of outstanding work. The FSS aims to mitigate financial risks and ensure the integrity of financial statements.