Japan’s Financial Services Agency (FSA) has published a draft audit firm governance code consisting of five principles and related guidance for implementation.
The draft Principles for Effective Management of Audit Firms (audit firm governance code) was developed by the Council of Experts on Audit Firm Governance Code.
The code is intended for the largest firms with many partners and other members that conduct audits of major listed companies.
Comments on the draft can be submitted up until 31 January 2017.
Among its principles the code states:
- the top of an audit firm should exercise its leadership to accomplish its role in the public interest
- An audit firm should clarify the role of its management in order to meet the public expectation of audits and ensure the firm’s effective management
- An audit firm should have proactive dialogue within the firm and with outside stakeholders about its management and operations.