TDAD 06

Chapter 6 — Thank You for Taking Revenge for Me

“Since Director Ma is no longer here… no, since he’s going to be gone… your opinion is important.”

Managing Director Choi spoke.

I had to stand by my opinion and explain the reasoning behind it. With Director Ma Seung-cheol out of the picture, some of that responsibility had fallen to me as a senior manager. I took a moment to gather my breath amid the brief silence.

“First, as an independent party, after reviewing the materials they provided, we found that the increase in operating profit is far too small compared to the increase in sales.”

Hearing that, the managing director quietly placed the glasses he had been wearing on the table. Then he rubbed his face and asked again.

“Yes, but didn’t they say that they lowered the unit price and reduced their profits because they exported the products they manufactured to third countries? That’s also reflected in the materials you briefed me on. If we don’t dig into it unnecessarily… wouldn’t this be something we could just let slide?”

It was certainly a possibility. No, it wasn’t merely possible—it was a perfectly reasonable explanation.

If there was solid evidence to support it.

“Yes, that’s correct. There’s a strong possibility that’s what happened. Their own materials provide a rough explanation for it as well. However, they haven’t provided sufficient documentation. There are some rather weak areas. Even so, they have flatly refused our requests for additional materials.”

Managing Director Choi Pil-yong began rubbing his temples again. Judging by the deepening furrow between his brows, I could guess what he was thinking.

Yes, this was undoubtedly an uncomfortable subject.

I pressed my point once more.

“Sir, if they really lowered their unit prices, there needs to be clear evidence supporting it. The numbers would make sense if they had produced more goods or secured more orders, but that part has been handled rather vaguely in the accounting records. The final figures add up, but the details don’t line up neatly.”

I instructed Kim Anna to put the relevant PPT slide back on the screen.

The managing director merely continued rubbing his temple without answering.

There are four types of opinions we can issue as the result of an accounting audit:

Unqualified, Qualified, Adverse, and Disclaimer of Opinion.

An unqualified opinion is issued when there are no violations of accounting standards that are material from the standpoint of materiality.

The qualified opinion currently under discussion is issued when violations of accounting standards or limitations on the audit are less than material. And, as in the current situation, a qualified opinion can also be issued when the client fails to provide sufficient evidence and is uncooperative.

An adverse opinion, naturally, is possible when violations are obvious and the financial statements are materially misstated.

Finally, a disclaimer of opinion means that the client has clearly failed to cooperate with the audit, resulting in pervasive limitations that prevent the auditor from forming an opinion.

“Mr. Lee Jin-ho…”

The managing director, who had been rubbing his temples with his eyes closed, called my name quietly.

Judging by the honorific he used, it seemed he had finished organizing his thoughts.

“I understand what you mean.”

Fortunately, the managing director seemed to have taken my point positively. His softened tone was almost warm.

Naturally.

“But let me ask you something. Do you know what kind of client Daewoo Electronics is?”

I hesitated before answering.

What exactly was Managing Director Choi Pil-yong getting at?

The sudden question that had emerged from his previously warm tone.

What kind of answer did he want from me?

‘A valuable client?’

That answer was too one-dimensional.

I needed to give him a different answer.

“Don’t worry about reading the room. Just answer me. Or should I phrase the question differently? How much does Daewoo Electronics pay us in audit fees every year?”

I had missed the timing.

This time, I answered immediately.

“Yes. 850 million won.”

“You know it precisely.”

A satisfied smile briefly appeared on his face. Then he continued questioning me.

“Then how long has Daewoo Electronics been our client?”

“Five years.”

“Right. Five years. They’ve been one of our valuable clients all this time. It wasn’t easy to bring them in as a client, either. And now you want to cause trouble based on an uncertain possibility?”

His tone began to turn cold again.

There was some truth to what he said. The opinion I had presented was, after all, only a suspicion.

In this age, where people could apparently get away with things simply by saying they didn’t remember, what good was a mere suspicion?

“An uncertain possibility… If that’s what you mean, then yes.”

“Exactly. Of course, it is strange. But… how long have you been a senior manager? You’re about to be promoted to director soon, aren’t you? Have you ever seen any of your seniors issue anything other than an unqualified opinion for a major client of this caliber?”

The answer, to put it simply, was no.

And nothing had gone wrong so far.

For one thing, large-scale accounting was extremely intricate, making it perfect for hiding things in plain sight. Unless you had overwhelmingly solid evidence, it was difficult to uncover anything. On top of that, the complicated power dynamics between clients and accounting firms made it difficult for auditors to issue anything other than an unqualified opinion.

“No, sir.”

“Exactly. I also value the way you’ve handled conflicts with clients smoothly, instructed them on proper accounting, compromised when necessary, and maintained unqualified opinions. Seeing you speak this strongly makes me want to accept your opinion as well. But things aren’t that simple…”

He turned his head.

“Mr. Choi Moon-young, what do you think?”

Choi Moon-young, who had been listening to our conversation like a coiled viper, immediately began presenting an opinion that was the exact opposite of mine.

He, too, had a responsibility to fill the void left by Director Ma Seung-cheol.

So it was obvious what he was going to say.

“Sir, I agree with you. There’s no definite violation, and the numbers add up one way or another. So I don’t understand why we should issue a qualified opinion. We’re not the Financial Supervisory Service. Sometimes, it’s better to let things be. And even if we issue a qualified opinion, how are we going to deal with the aftermath for all the retail investors who hold Daewoo Electronics stock? What crime have they committed?”

As soon as he finished speaking, the managing director’s expression softened again.

It was obvious that the answer he had wanted had come from Choi Moon-young.

My own tiny sense of justice—the sense of justice I prided myself on as a meticulous person—had become a shackle around my ankle.

“Mr. Lee, don’t confuse the definition of justice for an accountant. We’re on the client’s side, not on the side of justice. It isn’t our job to interrogate clients and cause them losses. Our version of justice is helping our clients run their businesses in a way that satisfies them. And we also have to think about the people who invested in those companies.”

“…”

“But I don’t dislike that side of you. A person needs to have some backbone.”

The managing director’s words offered me a small measure of comfort.

Perhaps they were nothing more than words of encouragement.

‘Think about the retail investors… What a beautiful excuse.’

If we pulled out a warning card over embezzlement that someone had committed, the retail investors would be the ones who suffered.

And if we simply turned a blind eye, the villains would profit.

Once again, the world belonged to those who knew how to take advantage of it.

People like my father-in-law.

And the higher-ups at Daewoo.

I wasn’t unaware of these circumstances.

Until now, I had been able to reach amicable agreements with other clients. But for some reason, Daewoo Electronics was unusually difficult.

That was precisely why we had reached this point.

“If you refuse to back down from your qualified opinion, we’ll have to hand Daewoo Electronics over entirely to Mr. Choi. Think it over for a moment.”

Maybe Managing Director Choi and Choi Moon-young were right.

Except for one thing that threatened our very survival.

“But we must not overlook the fact that the designated-audit season is approaching.”

“Designated audit? Ah, yes…”

It was a system that had only recently been introduced in Korea.

A designated audit is a system in which the Securities and Futures Commission designates an external auditor for companies deemed to require an independent external audit.

For six years, companies freely appoint their auditors, and for the following three years, the financial authorities designate the auditor.

The purpose is to prevent collusion between large corporations and accounting firms and to improve transparency and independence.

Therefore, we couldn’t afford to let our guard down this year.

If we continued handling things carelessly as we had in the past, we might end up paying dearly.

“And as you said, we’ve been working with them for five years now. A lot has happened during that time. Especially with Mr. Choi Moon-young.”

Except for recently, Choi Moon-young had been Daewoo Electronics’ primary person in charge for all those years.

A look of bewilderment crossed his face.

I remembered the expression he had worn moments earlier when he glared at me like a coiled viper.

“What are you trying to say!?”

“Ah, please don’t misunderstand me, Senior. I’m just talking about the facts.”

“The facts? Are you trying to screw me over right now?”

A tense atmosphere stretched between Choi Moon-young and me.

The managing director asked again.

“Fine. Let’s hear those facts.”

“Yes. In my opinion, the primary reason they’re unable to submit the additional materials I requested is that there has been a significant amount of false expense accounting. And I don’t think it’s something that happened over just one or two months. I suspect it’s been accumulating for a long time.”

“Hmm…”

“Moreover, Daewoo Electronics hasn’t provided even a single scrap of a receipt to support these suspected false expenses. If this becomes an issue, not only will they be the ones to suffer, but externally, people could also start saying that we failed to provide a solution.”

Even if we viewed it from a favorable perspective, there were suspicions.

And now an external audit was coming in?

‘They can’t possibly be confident about that.’

“Think back to the incident involving Taemang Construction, where costs were understated and operating profits were inflated. The resulting losses came close to five trillion won over five years. That fact was uncovered through a designated audit.”

“Yes… a designated audit…”

The managing director seemed to finally realize what he had overlooked.

“I hadn’t considered that.”

“Yes. Thank you for recognizing it.”

The viper-like look in Choi Moon-young’s eyes had disappeared, replaced by a dejected expression.

There was clearly something that had struck a nerve.

The industry’s long-standing practice of ‘what’s good is good’ could become the seed of a crisis because of this designated-audit system.

“All right. You’re right. We almost lost the forest for the trees…”

He turned toward Choi Moon-young.

“And Mr. Choi, stay behind for a moment.”

Choi Moon-young breathed heavily, clearly frustrated.

But there was nothing he could do.

That was how a society based on survival of the fittest worked.

If he didn’t want to end up looking like this, he should have handled his work more meticulously.

“Yes…”

I got up.

“Then I’ll head out into the field now and meet with the client. I’ll go with Ms. Kim Anna.”

“Go ahead. As expected, you’re someone worth keeping an eye on, Mr. Lee. Times change, after all.”

“Yes. Thank you, sir.”

The atmosphere in the conference room had changed.

The scales seemed to be tipping toward Lee Jin-ho.

“Whew…”

The wind was cold.

Then, all of a sudden, it began blowing fiercely.

Pedestrians started pulling their collars tighter, and the skeletal whale model in the company’s front courtyard looked as though it might be blown away by the wind at any moment.

It felt completely different from the morning, when it had looked as though it were about to swim through the open sky.

“Mr. Lee Jin-ho!”

“Yes?”

Kim Anna was looking up at me.

“Sir, you were amazing today. Did you see Mr. Choi Moon-young’s face?”

“Haha. Was I really?”

“Was it just good? I feel like I could go without eating today and still be completely satisfied.”

From Kim Anna’s perspective, I could understand why.

The humiliation of being treated as though she were invisible every time.

“He always treated you like you didn’t exist. Serves him right. Thank you for getting revenge for me.”

“Come on. Revenge? I just did my job.”

“You certainly did your job in a big way. Do you think I can become like you someday, Mr. Lee Jin-ho?”

It was nice that she was always so cheerful.

The cute junior employee was smiling as she said she wanted to make me her mentor.

That sight seemed to drive away even the cold wind, and the precarious whale once again looked like a free whale swimming through the sky.