Abstract
[Purpose] This study investigated the impact of the enhancement of the disclosure system and the supervisory functions of the National Tax Service on the restatement of nonprofit organizations(NPOs). Specifically, this study analyzes whether there are differences in the restatement and the time required for restatement of NPOs before and after the 2020 financial statements. Additionally, the study analyzes whether there is a differential impact on the restatement and the time required for restatement based on the type of external auditor.
 [Methodology] Applying the methodologies of previous studies on NPOs, this study selected and analyzed a sample of 615 organization-year data from 205 social welfare NPOs in the period from 2019 to 2021.
 [Findings] Empirical analysis results indicate the following：Firstly, the restatement occurrence and duration of NPOs significantly decreased after 2020 compared to the disclosure of 2019 financial statements. This is interpreted as a reduction in the restatement occurrence and duration of NPOs due to the strengthened the disclosure system and supervision by the National Tax Service. Furthermore, the decreasing duration of restatement suggests that NPOs are expediting the restatement process, leading to a gradual improvement in financial reporting quality. Secondly, it was confirmed that the type of external auditor influences the financial reporting quality of NPOs.
 [Implications] This study is the first to empirically analyze how the strengthened disclosure system affects the restatement of NPOs. Furthermore, it contributes to the continuity of empirical research in the nonprofit sector and expands on previous research that suggests restatement occurrences and the required time can serve as variables to measure the financial reporting quality of NPOs. The research results will be valuable to management authorities, donors, and NPOs in the future by highlighting the effects and significance of strengthening the disclosure system.
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