102 Consideration of the reform of the audit standards
Corporate Accounting Board Audit division of Financial Services Agency decided on May 30 2012 to consider the reform of the audit standards, after some incidents of corporate fraud these days.
The followings are the opinions raised in the board meeting.
– There is an audit expectation gap between stakeholders and auditors, in which auditor think that finding fraud is not obligatory for auditors and stakeholders would like auditors to discover the illegal act. This gap should be narrowed by applying broader audit procedures.
– Reviews from FSA and JICPA are so strict that auditors require more time spending for preparing the documents instead of sparing more time for actual auditing.
– Psychological pressure from the clients due to the direct contract of the audit.
It is useful for companies to switch auditors voluntarily in order to raise companies’ reliability while they usually think that switching auditors often is not considered to be good for the reliability. Switching auditors and addition of the audit procedure will impose more burden on companies, and how they are going to deal with this is an important point on this matter. Maybe asking investors for a part of the audit remuneration is one of the options.
In our country we also have a certification such as Certified Fraud Examiners, and will its demand increase in the future? How do they solve the audit expectation gap? We would like to see how the discussion will go in the future.
