Suggested citations
AGLC4 | 회계법 2015 [Accounting Law of the Democratic People's Republic of Korea (2015)] [tr Daye Gang].
Bluebook | Hoegyebeob 2015 [Accounting Law of the Democratic People's Republic of Korea (2015)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on March 5, Juche 92 (2003), as Directive No. 3628 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on September 16, Juche 97 (2008), as Directive No. 2887 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 8, Juche 104 (2015), as Directive No. 457 of the Presidium of the Supreme People’s Assembly
CHAPTER I. BASICS OF ACCOUNTING LAW
Article 1 (Objectives of Accounting Law)
The Accounting Law of the Democratic People’s Republic of Korea shall strictly adopt systems and order in accounting calculations, analysis, and inspection to serve to assure financial benefit in economic activities.
Article 2 (Definition of accounting and principles of accounting)
Accounting is a basic means of financial management to reflect economic activities in a monetary way and to control and calculate them. The State shall guarantee unity, objectivity, accuracy, and timeliness in accounting.
Article 3 (Classification of accounting)
Accounting shall be divided into business administration accounting and comprehensive accounting. Business administration accounting includes accounting for economic activities, and comprehensive accounting includes regional accounting, sectoral accounting, financial accounting, and central accounting.
Article 4 (Principle of strengthening guidance and control over accounting work)
Strengthening guidance and control over accounting work is a basic guarantee to adopt a Statewide monetary calculations system. The State shall correctly adopt a guidance system for accounting work and strengthen control over it.
Article 5 (Financial year and accounting currency)
A financial year is from January 1 to December 31. Accounting shall be done in North Korean won.
Article 6 (Principle of digitizing accounting work)
The State must realize the digitization of accounting work in conformity with the requirements of actual development.
Article 7 (Principle of research work and training of experts in accounting)
The State shall strengthen scientific research in the accounting field and must develop competent accounting professionals in a planned way.
Article 8 (International exchange and cooperation in the accounting field)
The State shall develop exchange and cooperation in the accounting field with international organizations and other countries.
Article 9 (Subject of application of laws)
This law shall apply to institutions, enterprises and organizations of the Republic that do accounting. This law shall not be applied to foreign country investment enterprises.
CHAPTER II. ACCOUNTING CALCULATIONS
Article 10 (Basic requirements of accounting calculations)
Accounting calculations are important work to routinely record and calculate changes in funds and finalizing their results. Institutions, enterprises and organizations must correctly do the accounting that is consistent with the stage of calculations.
Article 11 (Parties to business administration accounting calculations and the content of calculations)
Business administration accounting calculations shall be done by institutions, enterprises and organizations that independently do business activities. Institutions, enterprises and organizations must do calculations in relation to fixed assets, stored goods, labour remuneration, expenses expenditures and costs, produced goods, products, supplies, property in the designated currency, bonds and debt, financial income and expenditure, business administration income and expenditure and distribution, and foreign currency income and expenditure.
Article 12 (Parties to regional accounting calculations and content of calculations)
Regional accounting calculations shall be done by the regional financial institution.
Regional financial institutions must calculate local budget balance, financial conditions, and business administration balance.
Article 13 (Parties to sectoral accounting calculations and content of calculations)
Sectoral accounting calculations shall be done by the authorities concerned. The authorities concerned must calculate sectoral budget balance, financial conditions, and business administration balance.
Article 14 (Parties to financial accounting calculations and content of calculations)
Financial accounting calculations shall be done by banking institutions and insuring institutions. Banking institutions must calculate cashless settlement work; credit work; issuing, receipts, and disbursements work; foreign settlements and credit work; and insuring institutions must calculate insurance financial conditions and insurance work balance.
Article 15 (Parties to central accounting calculations and content of calculations)
Central accounting calculations shall be done by the central financial guidance institution. The central financial guidance institution must calculate the Statewide budget balance, financial conditions, business administration balance, foreign currency balance, and international balance.
Article 16 (Classification of accounting calculations stages)
Accounting calculations shall be divided into business operations calculations and settlements. Business operations calculations shall be done every time an economic transaction occurs, and settlements shall be done according to cycle.
Article 17 (Classification of accounting documents)
Accounting paperwork include accounting documents, accounting ledgers, and accounting settlement documents. The work of determining the type and form of accounting paperwork shall be done by the central financial guidance institution.
Article 18 (Beginning of business operations calculations)
Business operations calculations shall be based on original documents or the accounting reporting documents of lower units. Original documents and accounting reporting documents that are not guaranteed by law or do not conform to the contents of economic transactions may not be used as the foundational materials of business operations calculations.
Article 19 (Business operations calculations method)
Institutions, enterprises and organizations must combine business operations calculations with comprehensive calculations, segmented calculations, time-related calculations, system-related calculations, goods calculations and calculations of amounts. Business operations calculations shall use the method of double entry.
Article 20 (Review of business operations calculations results)
Institutions, enterprises and organizations must review the results of business operations calculations. Business operations calculations results reviews must be done using the method of comparing time-related calculations materials, system-related calculations materials, comprehensive calculations materials, and segmented calculations materials. For incorrect materials, their causes and the limits of their responsibility must be stated and they must be fixed.
Article 21 (Basis for accounting settlements)
Accounting settlements shall be based on business operations calculations materials. Institutions, enterprises and organizations must register trades that are missing before accounting settlement, must settle pending trades, and must do property inspections.
Article 22 (Cycles of accounting settlements)
Cycles of accounting settlements shall be quarterly, half-yearly, and annually. Institutions, enterprises and organizations must draft accounting settlement documents. Drafted business administration accounting settlement documents must receive accounting inspections.
Article 23 (Institutions submitting accounting settlement documents)
Accounting settlement documents shall be submitted to the following institutions.
1. Business administration accounting settlement documents must be submitted to the given regional financial institution and the higher level institution.
2. Regional accounting settlement documents shall be submitted to a higher level institution.
3. Sector accounting settlement documents shall be submitted to the given higher level institution.
4. Financial accounting settlement documents shall be submitted to the given financial institutions and higher level institutions.
5. Central accounting settlement documents shall be submitted to the Cabinet.
Article 24 (Legal effect of accounting settlement documents)
Accounting settlement documents shall receive the ratification of the given higher level institution. Accounting settlement documents that have not received ratification cannot have legal effect.
CHAPTER III. ACCOUNTING ANALYSIS
Article 25 (Basic requirements of accounting analysis)
Correctly doing accounting analysis is a foundational condition to grasp the true state of the economy and correctly do financial calculations. Institutions, enterprises and organizations must compulsorily do accounting analysis.
Article 26 (Content of accounting analysis)
Institutions, enterprises and organizations must analyse things such as the effectiveness of guaranteeing and using funds, business administration balance, the state of implementation of the budget, currency distribution, foreign currency balance, and international balance.
Article 27 (Basis of accounting analysis)
Accounting analysis shall be based on accounting settlement documents. In required cases, things such as business operations calculations materials, plan and statistical materials, work calculations materials, or technical and economic standards materials may also be used for accounting analysis.
Article 28 (Method of accounting analysis)
Accounting analysis shall be done by method of contrast analysis, taxonomic analysis, or linkage analysis. Institutions, enterprises and organizations must correctly apply methods correctly and in conformity with the purpose of the analysis.
Article 29 (Synthesis and use of accounting analysis materials)
Institutions, enterprises and organizations must synthesise analytical materials after the accounting analysis ends. Analytical materials must be used as financial calculations and production and financial review meeting materials for the execution of the national economic plan.
Article 30 (Cycle of accounting analysis)
Cycles of accounting analysis shall be by order, month, quarter, half-year, and year.
CHAPTER IV. ACCOUNTING INSPECTION
Article 31 (Importance of and parties to accounting inspections)
Accounting inspections are important work to review and confirm the accuracy and lawfulness of business administration accounting. Accounting inspections shall be done by the centre, province (or municipality directly under central authority), city (or district), or county accounting inspection institution and the given accounting inspection institution.
Article 32 (Subjects of accounting inspections)
Accounting inspections shall be done about the business administration accounting settlement documents. In cases where it is required for the inspection, accounting ledgers, and accounting documents can also be inspected.
Article 33 (Place of accounting inspections)
Accounting inspections shall be done by the accounting inspection institution. In required cases, inspections may also be done in the field.
Article 34 (Accounting inspection applications)
Institutions, enterprises and organizations doing business administration accounting must apply for accounting inspections at a designated institution. The work of determining the application period shall be done by the accounting inspection institution.
Article 35 (Adherence and inspection methods of accounting inspection period)
Accounting inspection institutions must inspect accounting settlement documents within the period determined. Accounting inspections shall be done using the method of reviewing the accuracy and connections of tables and materials of accounting settlement documents.
Article 36 (Confirmation of accounting inspection results and treatment of defects discovered)
Accounting inspection institutions must confirm accounting inspection results in time. For defects discovered during the inspection process, an opinion in writing must be given so that it can be fixed.
Article 37 (Making accounting inspections compulsory)
Institutions, enterprises and organizations must compulsorily receive accounting inspections. Accounting settlement documents that have received accounting inspections may not be changed at will.
Article 38 (State fees)
Institutions, enterprises and organizations that have received accounting inspections must pay the given State fees. The work of determining State fees shall be done by the central financial guidance institution.
CHAPTER V. GUIDANCE AND CONTROL FOR ACCOUNTING WORK
Article 39 (Guidance institution for accounting work)
Guidance for accounting work shall be done by the central financial guidance institution under the guidance of the Cabinet. The central financial guidance institution must command and guide accounting work in a standardized way.
Article 40 (Duties of regional financial institutions and authorities concerned)
Regional financial institutions and authorities concerned must normally discover and straighten the state of accounting calculations, analysis, and inspections of institutions, enterprises and organizations.
Article 41 (Storage of accounting documents)
Institutions, enterprises and organizations must compile accounting documents and preserve them for the designated period. Accounting documents must be stored in document rooms or document boxes that will not take damage such as from fire or natural disaster.
Article 42 (Qualifications of accounting workers and advancement of qualifications)
Only those who have the given qualifications may do accounting work. Institutions, enterprises and organizations must manage accounting workers and must work to raise their qualifications in a planned way.
Article 43 (Guarantee of conditions for accounting work)
Institutions, enterprises and organizations must assure working conditions for accounting. Accounting workers may request materials required for accounting work or may participate in meetings to consider issues related to accounting.
Article 44 (Transfer and takeover of accounting work)
Transfer and takeover of accounting work shall be done in cases where an accounting worker cannot do accounting work because of a cause such as an appointment, dismissal, mobilization, or treatment of illness. Transfer and takeover shall be done in writing with the attendance of a third party.
Article 45 (Supervision and control institution)
Supervision and control for accounting work shall be done by the central financial guidance institution and the given supervision and control institution. The central financial guidance institution and the given supervision and control institution must strictly supervise and control the state of accounting work of institutions, enterprises and organizations.
Article 46 (Suspension of work, levy of a penalty, damage compensation)
In cases where an accounting error has been made and economic loss has been caused, the work shall be suspended and a penalty shall be levied or the given damage shall be compensated.
Article 47 (Demotion or deprivation of qualifications grades)
In cases where accounting documents were not drafted in time or an accounting inspection was not correctly done so interference was caused to economic administration, the accounting workers shall have decreased or deprived their qualifications grades.
Article 48 (Administrative or criminal responsibility)
For responsible workers of institutions, enterprises and organizations or individual citizens who have interfered with accounting work or caused grave consequences by doing acts such as counterfeiting accounting documents or discarding them before the preservation period ends, administrative or criminal responsibility shall be imposed depending on the gravity.
Last updated 27 April 2021