Corporate books in Japan do not face as much scrutiny as their US or European corporate counterparts whose audting firms spend two to three times as long when carrying out audits. That?s the view of Tsuguoki Fujinuma, the chairman designate of the Japanese Institute of certified public accountants (JIPCO).
Japan's accounting firms should spend more time checking corporate earnings and balance sheets, he says, and regulators in Japan may be given the power to penalize underperforming audit firms by the new Japanese accounting oversight board.
The certified public accountants and auditing oversight board, created in April, said it will fully implement its new oversight program by the fiscal year beginning April 2006. The body will begin its review by studying a report on audit quality by JICPA. The board has the authority to inspect auditors' records and ask the Financial Services Agency to take administrative action against audit firms carrying out sub-standard work.