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JICPA issues a pronouncement in relation to a case when CPAs are requested to perform business valuation or other valuation work

August 10, 2012

In light of the recent corporate scandals, JICPA formed the Special Committee on the Improvement of Auditing System to discuss the current practice of auditing and what should be the appropriate corporate governance. The key issues include: (1) consideration of the relationship between corporate governance and external audits; (2) re-examination of the auditor’s procedures in response to detected fraud, errors, and illegal acts; (3) re-examination of practice guidelines on audit, relating to fraud or other illegal acts; (4) consideration of cases when CPAs are requested to perform appraisal or valuation work; and (5) confirmation of the significance and purpose of audits, as well as how audits should be conducted in the Japanese socio-economy and the capital markets, and consideration of ways to promote greater understanding of the role of audits.

As a result of careful consideration of the issue related to the valuation work, JICPA has published the pronouncement No. 3, “Matters for Consideration when CPAs conduct business valuation and other valuation work.”

This document is available only in Japanese.

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