Failure of Control Environment of Daewoo Shipbuilding & Marine Engineering Co., Ltd.

Hansol Lea, Seung Wan Eun, Ho Young Lee, Gitae Park

Research output: Contribution to journalReview articlepeer-review


In July 2015, one of the biggest shipbuilding and marine engineering companies in Korea, Daewoo Shipbuilding & Marine Engineering Co., LTD (DSME), suddenly reported operating losses of 2.73 billion USD, resulting in chaos and frustration of investors and market participants. The announcement of this huge loss was the result of an accounting fraud conducted by the management team. Adam Kim, the former CEO of the company, concealed 4.5 billion dollars of losses by manipulating the accounting performances. This case exemplifies the results of the weak control environment. This paper examines the consequences of the weak control environment and ineffective monitoring activities of DSME.

Original languageEnglish
Pages (from-to)561-593
Number of pages33
JournalAsian Case Research Journal
Issue number2
Publication statusPublished - 2019 Dec 1

Bibliographical note

Publisher Copyright:
© 2019 World Scientific Publishing Co.

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)


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