Draft Audit Standards Revision Released

Against the backdrop of corporate failures and scandals, interest in going concern assumptions has grown. International auditing standards have expanded auditors’ procedures for examining management’s assessments, revised the assessment period, and amended the matters to be included in audit reports.

Following fraud cases in Japan and abroad, stakeholders have raised questions about auditors’ roles and responsibilities, and countries have pursued their own responses. A series of accounting fraud cases also occurred in Japan, and various opinions were expressed during deliberations.

For going concern assumptions, the policy is to maintain consistency with international auditing standards, require auditors to respond more appropriately, and improve related explanations and information provision. For fraud, the policy is to verify consistency between international auditing standards and Japan’s audit standards and fraud risk response standards, and to examine whether the domestic standards require appropriate responses in light of the characteristics of recent accounting fraud cases.

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For details, refer to Appendix 1, “Draft Revision of the Audit Standards,” and Appendix 2, “Audit Standards (Excerpt): Comparison of Old and New Provisions.”