FSA agrees on mutual Reliance with Foreign Jurisdictions in the Area of Audit Oversight
The Japanese Financial Services Agency (FSA) and the Certified Public Accountants and Auditing Oversight Board (CPAAOB) published “A Framework for Inspection / Supervision of Foreign Audit Firms, etc.” on September 14, 2009, and stated that with respect to information requirements and inspections regarding foreign audit firms, the FSA and the CPAAOB will, in principle, rely on such actions by the competent authorities of the firm’s home jurisdictions, instead of seeking to obtain information from or conducting inspections on firms themselves, provided that (a) audit and public oversight systems in the firm’s home jurisdictions are equivalent to those of Japan, (b) necessary information can be provided from the foreign competent authorities through appropriate arrangements of information exchange, and (c) reciprocity is ensured.
The FSA/CPAAOB and the following authority will, in principle, mutually rely on the oversight of foreign audit firms in their home countries (the Netherlands Authority for the Financial Markets (AFM) is the first case to reach mutual reliance).
Source: FSA
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