103 Reform of the Audit Standards – 2
Financial Services Agency held a discussion on June 27, 2012 on the reform of the audit standards.
Committees made a comment that they should be consistent with other countries’, especially with US audit standards.
While accounting frauds are increasing these days in Japan, nothing big has recently happened in the U.S. Therefore, we wonder whether rules and regulations in the U.S. are more effective. The differences between both audit standards are the followings:
– It is required to analyze the risk factor in the risk evaluation of the fraud in the U.S. while it is not in Japan.
– Records and vouchers are considered authentic unless they are proved to be contradictory by other audit proof in Japan while this rule has been deleted from the standards in the U.S. because it could diminish the effect of rules and regulations.
They point out that accounting firms may consider to give education about accounting fraud to their accountants and make cooperation with professionals on fraud (Forensic Accountant, Certified Fraud Examiner, etc.).
It is interesting to see what comes next.
