JICPA introduces registration system of audit firms which audit listed companies
May 18, 2007JICPA introduced a system to register audit firms which audit listed companies in April 2007. The aims of this new system are to enhance the quality control of audit firms which audit listed companies - these tend to have wider public influence, and to ensure confidence in audits by CPAs in capital markets.
The new system requires all firms which audit listed companies to register with the Center of Listed Company Audit Firms and to publish an outline which includes a description of its audit quality control systems. This allows market participants including investors to understand the level of quality control of audits by the registered audit firms. In addition, when a deficiency is identified in the quality control of a registered audit firm as a result of a quality control review, measures such as recommendations or striking the firm off the register are taken. These measures enhance the effectiveness of the improvements made to the quality control of registered audit firms.