UK and Japanese audit regulators agree to co-operate on cross-border supervision

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09 Jun, 2014

The Financial Reporting Council (FRC) has announced that it has entered into a co-operation agreement with the Certified Public Accountants and Auditing Oversight Board (CPAAOB) and the Financial Services Agency of Japan (JFSA) to facilitate the exchange of information related to the oversight of auditors and mutual cooperation in the area of public oversight, registration, inspections and investigations of auditors of companies that are subject to the regulatory jurisdictions of both parties.

The Companies Act and supporting regulations implementing the Statutory Audit Directive require that third country auditors (those outside the EEA) are registered with the FRC. The degree of oversight by the FRC depends on the local regulatory environment. The European Commission has recently ruled that the Japanese regime is “equivalent”, allowing mutual reliance on inspection, and these mutual co-operation agreements give effect to this in the UK, allowing the exchange of regulatory information between UK and Japanese audit regulators. 

A copy of the FRC press release, including links to the exchange of letters, can be found on the FRC website.

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