InspectionofErnstYoungHanYoung-PCAOB

1666 K Street, N.W.

Washington, DC 20006

Telephone: (202) 207-9100

Facsimile: (202) 862-8433

Inspection of

Ernst & Young Han Young

(Headquartered in Seoul, Republic of Korea)

Issued by the

Public Company Accounting Oversight Board

April 29, 2011

PCAOB RELEASE NO. 104-2011-145

PCAOB Release No. 104-2011-145

Notes Concerning this Report

1. Portions of this report may describe deficiencies or potential deficiencies in the systems,

policies, procedures, practices, or conduct of the firm that is the subject of this report.

The express inclusion of certain deficiencies and potential deficiencies, however, should

not be construed to support any negative inference that any other aspect of the firm's

systems, policies, procedures, practices, or conduct is approved or condoned by the

Board or judged by the Board to comply with laws, rules, and professional standards.

2. Any references in this report to violations or potential violations of law, rules, or

professional standards should be understood in the supervisory context in which this

report was prepared. Any such references are not a result of an adversarial adjudicative

process and do not constitute conclusive findings of fact or of violations for purposes of

imposing legal liability. Similarly, any description herein of a firm's cooperation in

addressing issues constructively should not be construed, and is not construed by the

Board, as an admission, for purposes of potential legal liability, of any violation.

3. Board inspections encompass, among other things, whether the firm has failed to

identify financial statement misstatements, including failures to comply with Securities

and Exchange Commission ("SEC" or "Commission") disclosure requirements, in its

audits of financial statements. This report's descriptions of any such auditing failures

necessarily involve descriptions of the apparent misstatements or disclosure departures.

The Board, however, has no authority to prescribe the form or content of an issuer's

financial statements. That authority, and the authority to make binding determinations

concerning whether an issuer's financial statements are misstated or fail to comply with

Commission disclosure requirements, rests with the Commission. Any description, in

this report, of financial statement misstatements or failures to comply with Commission

disclosure requirements should not be understood as an indication that the Commission

has considered or made any determination regarding these issues unless otherwise

expressly stated.

PCAOB Release No. 104-2011-145

INSPECTION OF ERNST & YOUNG HAN YOUNG

The Public Company Accounting Oversight Board ("PCAOB" or "the Board") has

conducted an inspection of the registered public accounting firm Ernst & Young Han

Young ("the Firm"). The Board is issuing this report of that inspection in accordance

with the requirements of the Sarbanes-Oxley Act of 2002 ("the Act").

The Act restricts the Board from publicly disclosing portions of an inspection

report that discuss certain types of deficiencies or certain other nonpublic information.1/

Because the inspection did not identify instances of such deficiencies, and because the

report does not otherwise disclose protected information, the Board is making the entire

report available to the public.

1/ The Board has elsewhere described in detail its approach to making

inspection-related information publicly available consistent with legal restrictions. See

Statement Concerning the Issuance of Inspection Reports, PCAOB Release No. 104-2004-001 (August 26, 2004).

PCAOB Release No. 104-2011-145

Inspection of Ernst & Young Han Young

April 29, 2011

Page 2

PART I

INSPECTION PROCEDURES AND CERTAIN OBSERVATIONS

Members of the Board's inspection staff ("the inspection team") conducted

primary procedures for the inspection from July 7, 2009 to July 17, 2009.2/ These

procedures were tailored to the nature of the Firm, certain aspects of which the

inspection team understood at the outset of the inspection to be as follows:

Number of offices

Ownership structure

Number of partners

Number of professional staff3/

Number of issuer audit clients4/

2 (Busan and Seoul, Republic of Korea)

Limited liability company

61

704

None

Number of

other issuer audits in 28

5/

which the Firm plays a role

2/ The Board's inspection was conducted in cooperation with the Financial

Supervisory Service of Korea.

"Professional staff" includes all personnel of the Firm, except partners or

shareholders and administrative support personnel. The number of partners and

professional staff is provided here as an indication of the size of the Firm, and does not

necessarily represent the number of the Firm's professionals who participate in audits of

issuers or are "associated persons" (as defined in the Act) of the Firm.

3/ The number of issuer audit clients shown here is based on the Firm's self-reporting and the inspection team's review of certain information for inspection planning

purposes. It does not reflect any Board determination concerning which, or how many,

of the Firm's audit clients are "issuers" as defined in the Act. In some circumstances, a

Board inspection may include a review of a firm's audit of financial statements of an

issuer that ceased to be an audit client before the inspection, and any such former

clients are not included in the number shown here.

4/The number of other issuer audits encompasses audit work performed by

the Firm in engagements for which the Firm was not the principal auditor, including

5/

PCAOB Release No. 104-2011-145

Inspection of Ernst & Young Han Young

April 29, 2011

Page 3

Board inspections are designed to identify and address weaknesses and

deficiencies related to how a firm conducts audit work.6/ To achieve that goal, Board

inspections include reviews of certain aspects of selected audit work performed by the

firm and reviews of other matters related to the firm's quality control system.

In the course of reviewing aspects of selected audit work, an inspection may

identify ways in which particular audit work is deficient, including failures by the firm to

identify, or to address appropriately, departures from U.S. Generally Accepted

Accounting Principles ("GAAP"), or, as applicable, International Financial Reporting

Standards as issued by the International Accounting Standards Board ("IFRS").7/ It is

not the purpose of an inspection, however, to review all of a firm's audit work or to

identify every respect in which an audit performed by the firm, or in which the firm

played a role, is deficient. Accordingly, a Board inspection report should not be

understood to provide any assurance that the firm's audit work, or the relevant issuer

financial statements, are free of any deficiencies not specifically described in an

inspection report.

A. Review of Audit Engagements

The inspection procedures included a review of aspects of the Firm's audit work

on two issuer audit engagements in which it played a role but was not the principal

auditor. The scope of this review was determined according to the Board's criteria, and

the Firm was not allowed an opportunity to limit or influence the scope. This review did

not identify any audit performance issues that, in the inspection team's view, resulted in

audits, if any, in which the Firm plays a substantial role as defined in PCAOB Rule

1001(p)(ii).

6/ This focus necessarily carries through to reports on inspections and,

accordingly, Board inspection reports are not intended to serve as balanced report

cards or overall rating tools.

7/ When it comes to the Board's attention that an issuer's financial

statements appear not to present fairly, in a material respect, the financial position,

results of operations, or cash flows of the issuer in conformity with GAAP or IFRS, the

Board's practice is to report that information to the SEC, which has jurisdiction to

determine proper accounting in issuers' financial statements.

PCAOB Release No. 104-2011-145

Inspection of Ernst & Young Han Young

April 29, 2011

Page 4

the Firm failing to obtain sufficient competent evidential matter to fulfill the objectives of

its role in the engagements.

B. Review of Quality Control System

In addition to evaluating the quality of the audit work performed, the inspection

included review of certain of the Firm's practices, policies, and procedures related to

audit quality. This review addressed practices, policies, and procedures concerning

audit performance and the following eight functional areas (1) tone at the top; (2)

practices for partner evaluation, compensation, admission, assignment of

responsibilities, and disciplinary actions; (3) independence implications of non-audit

services; business ventures, alliances, and arrangements; personal financial interests;

and commissions and contingent fees; (4) practices for client acceptance and retention;

(5) practices for consultations on accounting, auditing, and SEC matters; (6) the Firm's

internal inspection program; (7) practices for establishment and communication of audit

policies, procedures, and methodologies, including training; and (8) the supervision by

the Firm's audit engagement teams of the work performed by foreign affiliates. The

inspection team did not identify anything that it considered to be a quality control defect

that warrants discussion in a Board inspection report.

END OF PART I

PCAOB Release No. 104-2011-145

Inspection of Ernst & Young Han Young

April 29, 2011

Page 5

PART II

RESPONSE OF THE FIRM TO DRAFT INSPECTION REPORT

Pursuant to section 104(f) of the Act, 15 U.S.C. § 7214(f), and PCAOB Rule

4007(a), the Firm provided a written response to a draft of this report. Pursuant to

section 104(f) of the Act and PCAOB Rule 4007(b), the Firm's response, minus any

portion granted confidential treatment, is attached hereto and made part of this final

inspection report.