Permanent Inspector Jeong Song-hag of Korea Asset Management Corp. (KAMCO) & Chairman of the Institute of Public Corporation Internal Auditors of Korea (IPCA Korea) 

Chairman Jeong Song-hag, right, accepts the flag of the Institute of Public Corporation Internal Auditors of Korea at the institute's initiation meeting on Feb. 27, 2015.

Permanent Inspector Jeong Song-hag of Korea Asset Management Corp. (KAMCO) said the ultimate purpose of auditing should be the prevention of corruption by seeking out risk factors before hand. Auditors should always prepare themselves to be professional in conducting their responsibilities, which include checking management and at the same time helping the company achieve its management targets.

Following are excerpts from a written interview with Jeong Song-hag.

Question: It’s been over a year already since your appointment as the Permanent Inspector of Korea Asset Management Corp. (KAMCO), wrapping up four years of service as a public servant, which was followed by over 30 years in the private business community. There have been many changes and results since you took over as the Permanent Inspector at KAMCO. Can you talk about those? 

Answer: The Permanent Inspector is in a position to check management and at the same time work together to achieve management’s targets, as well as maximize customer satisfaction. As a civilian and bureaucratic CEO, I have experience in business leadership and local administrative management, and I can do my job the best as an Permanent Inspector by providing coaching as well as consulting. How? I do this by providing effective measures for development by informing of risks that may happen in the future. In order to do my job more effectively, I made up a slogan for the audit department that says, “Creatively Open Auditing and Happy KAMCO Jump” in a way to show the new paradigm for auditing to point out the direction of the organization’s operational values. 

I always felt that independence and professionalism should be taken care of to boost the effectiveness of internal auditing. Therefore, I have been providing all kinds of educational chances for those working for the audit unit to strengthen their professionalism and upgrade the quality of auditing. At the same time, I have been at work to reform the audit regulations to ensure independence of the auditing unit.

I have done part of my job to make KAMCO a public entity that the public wants with a positive participation in the execution of state policies by implementing the public organization normalization measures through voluntary discussions and reform efforts.

Q: You have been elected as the first chairman of the Institute of Public Corporation Internal Auditors of Korea and therefore can do a lot to reform and make changes at public organizations. Please tell us your plans or ideas as the chairman of the Audit Institute?

A: These days, responsibility is emphasized in all areas of public organization management, and the competitive strength of auditing is being transferred to each organization’s competitive power. The competitive power of auditing depends on the ability of an auditor. Auditors who make up members of a institute should get together often to share advanced auditing knowledge so that more positive changes can be made at the public sector.

What all the people in the country appear to want has been deep reforms at public organizations, and I have been thinking since my election as the chairman of the institute that the institute should lead the changes and reform at public organizations.

We decided to set up the institute agreeing on the need for auditors around the country to get together at one place and discuss various problems in auditing and to share knowledge amongst members of the institute. We finally got approval from the Audit Board to set up the institute last December and have been able to solidify the institute’s activity base at the initial meeting to set up the institute on Feb. 27.

The participants at the initial meeting included Secretary-General Kim Young-ho of the Audit Board, Chairman Byun Chung-seok of the Korea Audit Association and auditors from 107 organizations to form a link among audit departments of public organizations to improve shortcomings in auditing at those entities to make a contribution to the national economy’s development. Speaker Chung Ui-hwa of the National Assembly and Chairman Lee Seong-bo of the Anti-Corruption and Civil Rights Commission of Korea sent bouquets of flowers as they were not able to come to the meeting.

Members of the IPCA Korea, including Chairman Jeong Song-hag of the institute, pose for a photo session after the creation of the institute on Feb. 27, 2015.

Q: We understand that the Institute of Public Corporation Internal Auditors of Korea is set to support government policy directions and make sure that auditors will do their jobs right by giving them enough support. Can you please elaborate?

A: The Institute of Public Corporation Internal Auditors of Korea had its beginning in 2008 when it was called the Public Organization Advanced Audit Institute, and has been supporting the directions of government policies and working for the development of the internal audits of public organizations by holding events such as seminars and academic meetings. We expect the audit institute to play a bigger role so that public organizations can better help national development. All auditors who are members of the audit institute will lead their respective organization as “second CEOs” by providing consulting. I have been running the audit institute so that members share current problems that public organizations are faced. I have invited renowned legislators and government ministers to hear what they have to say on public issues so that the audit institute can be of help for normalization of public organizations, rooting out corruption and support the direction of the government’s major policies. The audit institute has also been lending a hand to the member auditor of the institute to help make the organization transparent, providing measures to root out corruption, as a companion to top leaders by concluding tie-ups with the related internal audit organizations so that public organizations will be normalized, driving out all corruptive practices and support the directions of government.

Q: You have been known to have done a lot of work to reform management at KAMCO. Can you please enlighten us?

A: In recent days, the government has been showing a strong determination to reform public organizations amid high expectations on the part of the people to correct loose management and operational results, emphasizing tight auditing on those organizations.

We have been focusing on the prevention of loose management, which is the most needed measure to strengthen the competitiveness of public organizations.

Therefore, we have been making efforts for analyzing different types of loose management cases and seeking out any likely instances of loose management risks. The idea is to prevent them from occurring through effective management of foreseen risk factors. We have installed a constant monitoring system to tighten internal control. We have been providing consulting and coaching on auditing so that structural problems can be confirmed and redressed.

We plan to expand auditing to all areas of a company’s operation to support and restrain the management through more positive auditing for the sake of increased customer satisfaction and helping the management achieve its targets.

Chairman Jeong Song-hag, who also is Permanent Inspector of KAMCO speaks at the initiation meeting of the Institute of Public Corporation Internal Auditors of Korea on Feb. 27, 2015 after his election as the chairman of the institute.

Q: You have been known to have stressed the use of advanced auditing methods. Can you please elaborate on that?

A: The paradigm for internal auditing has changed from oversight auditing to the Insight-Foresight auditing, centered on a process to support internal control and risk management, and forecast future problems ahead of time.

What I have been stressing is not much different from what’s been noted above. In-house auditing makes checkups on management, but it also has to go along with management to achieve the company’s targets. Therefore, I have been stressing that auditors should continue to develop their auditing skills to strengthen their professionalism and further develop their coaching and consulting capacities.

I would also like to see more exchanges among auditors of other companies so that KAMCO’s excellent auditing capacities can be spread to those auditors. In fact, we have signed agreements with such government-owned entities as the Korea Housing Finance Corp., the Public Servant Retirement Fund Corp., and the Korea Western Power Co. to exchange in-house auditing know-how.

The most important thing is that auditors can learn from one another on techniques to upgrade auditing effects by improving quality to boost auditing results.

Q: What’s your resolution for anti-corruption system reform? 

A: Watching and finding misdeeds are the basic responsibilities of auditing, but they should not be the final targets of auditing. In-house auditing should focus on finding risk factors through an effective internal auditing system and prevent any misdeeds from occurring.

The main jobs of in-house auditing of public organizations include increasing transparency, helping them gain public trust and preventing all forms of corruption before they happen.

KAMCO has been seeking areas of reform tasks. In 2014, the company found 38 cases of reform tasks and completed them, which helped us win excellence evaluations in the Corruption Prevention Policy Evaluation. Those were related to the investigation of public organizations conducted by the Anti-Corruption and Civil Rights Commission of Korea. 

We will continue to uncover tasks for reform to prevent corruption at KAMCO by strengthening the monitoring system to prevent misconduct so the public can live in a society free of corruptive practices.

A photo of leading executives of Korea Asset Management Corp. cutting tapes to open the company’s new office building in the Busan International Finance Center in Busan on Jan. 15, this year.

Photo of auditors who are members of the Institute of Public Corporation Internal Auditors of Korea including Chairman Jeong Song-hag pose for a group photo following the regular meeting of the institute on Oct. 16 at the Riverside Hotel in Seoul.(Photos:KAMCO)