What happens if the company's head or accountant is sued under the Commercial Accounting Law? From investigation and evidence to criminal defense.

If a company's head or accountant has received a notice from the investigation bureau, district prosecutor's office, or court due to the Commercial Accounting Act, the most important thing now is not to re-examine all accounting regulations, but to first identify which transaction, which voucher, which accounting treatment the prosecutor is questioning, and what role they actually played in the decision-making, preparation, approval, or use of the documents.

Commercial accounting law cases often involve comparing contracts, invoices, accounting vouchers, general ledgers, financial statements, bank transactions, emails, and supervisor instructions. The defendant's defense should not simply focus on "it's all accounting treatment" or "I was just following my supervisor's instructions," but rather on demonstrating the authenticity of the transaction, the division of authority, and the defendant's subjective understanding at the time through objective data.

If it is still necessary to determine which vouchers, ledgers, or financial statements may involve criminal liability, you can refer to the following:Legal violations and evidence assessment in commercial accounting lawA complete summary.

First, determine: At what stage is the commercial accounting law case currently progressing?

I just received a notification from the Investigation Bureau, the District Prosecutor's Office, or the court.

First, confirm the notifying authority, case number, cause of action, time of arrival, and your procedural status. Also, review the companies, transaction periods, and documents mentioned in the notification. Do not rely solely on memory to explain matters before verifying accounts from previous years; retain the notification and original documents to establish a preliminary timeline.

The company was searched or its documents and equipment were seized.

Save the search warrant, list of seized items, and on-site records to confirm which mobile phones, computers, ledgers, and cloud data were taken, and legally preserve any original data that has not yet been seized. Do not delete, rewrite, or ask colleagues to give a consistent account. If the issue involves an upcoming interview or a recent search, please read...Immediate action taken when company executives are summoned by the investigation bureau or when the company is searched..

The District Prosecutor's Office is investigating.

During this stage, based on the case file and the direction of questioning, identify the transactions, accounts, and roles questioned by the prosecution, and supplement the contract, performance, cash flow, signing, and communication data. If necessary, provide written explanations of objective information to avoid relying solely on general denials or contradictory verbal statements.

The case has been filed and is now in court.

It is necessary to verify each of the facts of the crime as identified in the indictment, the role of the defendant, the evidence cited, and the interpretation of the financial transactions before deciding on the authenticity of the disputed transactions, subjective intent, identity requirements, or participation behavior. If choosing to admit to some facts, it is also important to clearly distinguish the scope of the admission from the remaining disputed points.

What do prosecutors typically want to confirm in commercial accounting law cases?

The investigation usually focuses on: whether the transaction is genuine, why the invoice or voucher was made in this way, why it was recorded in the accounts in this way, who provided the original data, who requested the accounting processing, who approved it, and whether the company's responsible person and accounting personnel knew at the time that the content was untrue.

The prosecution will also compare the accounting records with the actual cash flow to determine if the financial statements were misleading, and whether the documents were used for tax filing, loans, fundraising, or external purposes. Criminal liability is determined based on an individual's knowledge, participation, and actions; it is not automatically shared responsibility simply because someone works for the company.

In a case concerning commercial accounting law, what four types of materials should be prepared before taking a statement or responding?

I. Transaction Authenticity

Organize contracts, quotations, orders, deliveries, service results, acceptance records, and other relevant information to prove whether a transaction exists, what its purpose is, and whether there is genuine performance behind the accounts.

II. Accounting Vouchers and Books

Retain original versions of invoices, receipts, vouchers, general ledgers, financial statements, and tax returns to confirm who provided the information, how it was recorded, when adjustments were made, and where the discrepancies between the recorded information and the actual transactions came from.

III. Bank Cash Flow

Organize payments, receipts, repayments, beneficiaries, and uses of funds to ensure that each cash flow corresponds to a specific transaction. This helps distinguish between genuine payments, collections and payments on behalf of others, loans, investments, related-party transactions, or questionable arrangements.

IV. Decision-making and Authority Records

Board meetings, shareholder meetings, emails, LINE messages, signed documents, meeting materials, supervisor instructions, and correspondence with accountants can prove who had decision-making power, who provided information, who approved it, and what each defendant actually knew at the time.

Why do company leaders, accountants, and department heads focus their defenses differently?

Company head

They are typically examined to determine whether they had control over transactions and funds, whether they issued or approved instructions, whether they used financial statements, and whether they benefited from the arrangements. Claims of non-participation must be supported by company authority and actual procedures, not merely by job responsibilities.

Accountants

The key points are the source of the data, the processing authority, whether the anomalies are obvious, whether any questions were raised, and whether the documents were prepared knowingly despite the transaction being fraudulent. Accountants should be judged separately for whether they are recording transactions normally based on existing data, and for whether they are actively designing or cooperating in creating false accounts.

Directors, managers and department heads

It is necessary to confirm whether they participated in the transaction, provided original documents, instructed payment requests, approved payments, or used documents externally. A professional title alone is insufficient to prove a crime, nor is it sufficient to absolve liability; the specific authority, level of knowledge, and actual actions must be examined.

Four most common ways to handle errors in commercial accounting law cases

"It was all done by the accountant; I don't know anything about it."

If the company's responsible person approved the transaction, controlled the cash flow, or used the financial statements, simply shifting the blame to the accountant may conflict with objective data. The true division of responsibilities and the scope of information access should be explained.

"I just did what my boss told me to do."

Supervisory instructions are important evidence, but accountants may still be examined to see if they knowingly provided false information. Instructions, original documents, and records of any questions raised should be preserved, demonstrating the accountant's actual ability to determine the authenticity of the transaction.

"The transaction has an invoice, so it must be genuine."

Formal documentation does not equate to the authenticity of a transaction. Prosecutors will typically continue to compare delivery, services, acceptance, payments, receipts, and the ultimate beneficiary.

"Just correct the accounts and everything will be fine."

Once a case enters criminal proceedings, arbitrarily rewriting or overwriting the original account books may raise concerns about the integrity of the data and the destruction of evidence. The original version should be preserved first, and then legal methods of correction should be discussed with lawyers and accounting professionals.

How should criminal defense for commercial accounting law be established?

The defense should start from the prosecution's assumption of guilt, verifying each element of the case: identity requirements, transaction authenticity, document content, financial flow, involvement, and subjective intent. Different defendants may have different sources and access to information; therefore, a single, general statement should not be used. In cases involving business operations, director liability, or significant economic crimes, a separate defense may be necessary.Corporate Criminal and White-Collar Crime DefenseThe structure integrates corporate, accounting, financial, and criminal procedures.

Whether there is room for appealing for non-prosecution or acquittal depends on the specific evidence and legal requirements; the outcome cannot be guaranteed in advance. Even after the first statement has been taken, supplementary objective information and responses can still be submitted according to law. The key is to first verify existing statements to avoid adding unverifiable or contradictory claims. General investigative procedures can be referenced elsewhere.District Prosecutor's Office Investigation and Defense Preparation.

Common Cases of Being Sued in Business Accounting Law

Does receiving a subpoena under the Business Accounting Act mean you are already a defendant?

Not necessarily. The identity, cause of action, and notifying authority on the summons should be confirmed; being listed as a defendant only indicates that an investigation or trial has begun, and does not equate to a conviction.

Can the company's head claim that all accounting entries were handled by an accountant?

A clear division of responsibilities can be provided, but it must be consistent with decision-making, approval, cash flow, and document usage records. Simply separating responsibilities is usually insufficient if the person in charge actually gave instructions or approval.

Can an accountant who is merely following instructions from their supervisor still face criminal charges?

It is still necessary to examine whether the accounting staff were aware of the falsification, what documents they actually prepared, and whether they were able to identify the unusual information. Supervisory instructions are one piece of evidence, but they do not automatically determine liability.

Will you always be sued if there are errors in your books or financial statements?

Not necessarily. Negligence and misclassification are different from intentional misrepresentation; whether to prosecute depends on the individual's identity, conduct, subjective perception, and the overall evidence.

Is it possible to win a non-prosecution or acquittal in a business accounting law case?

If there is evidence to dispute regarding identity, participation, authenticity of transactions, or subjective intent, a defense may be possible; however, the outcome depends on the specific case file and cannot be guaranteed.

After the first statement has been taken, is it possible to submit additional information or submit a defense?

Supplementary materials or written responses may be submitted in accordance with the law. The contents of the transcript should be verified first, and then objective materials that can verify the transaction, authority, cash flow, and the understanding at the time should be provided.

Have you received a subpoena for the Commercial Accounting Act or are you under investigation?

If the company's responsible person, director, accountant, or supervisor has received a notice from the Investigation Bureau, District Prosecutor's Office, or court regarding issues related to accounting books, vouchers, financial statements, or company funds, they can first organize the summons, key transaction information, accounting books, bank statements, accounting vouchers, and internal decision-making records, and then determine the direction of the investigation and defense based on the current procedures.

Fidelity Law Firm can assist in the overall analysis of cases, including transactions, accounting data, cash flow, and criminal proceedings.

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