The countervailing power of Japanese auditors

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URI http://shark.lib.kagawa-u.ac.jp/kuir/metadata/5518
Title
The countervailing power of Japanese auditors
File
Description

In general theory, an auditor is asked to check an act of director in company as a part of corporate governance. Control function by each auditor is arranged in Japanese two legal institutions which are Commercial Code (CC) auditing system by auditor (Kansayaku) and accounting auditor (Kaikei-kansanin) and Securities and Exchange Law (SEL) auditing system by CPA auditor. Therefore, the business control systems are established as formal mechanisms better than other countries. But in relation with recent general contractor's corruption, an auditor took part in the malfeasance act with director rather than carried out his duty. On this account, criticism that auditor did not say what he should say has fixed. In this paper, we make clear whether such criticism is true and he performs his control function. And if he does not accomplish his function, we examine what kind of causes prevent its execution. Auditor originally directs client's accounting procedure correctly by his authority to attach qualification to audit report. Nevertheless, in our audit for listed company, an adverse opinion and denial opinion have not been expressed, especially since 1975 when CPA auditor was introduced into CC audit and unified CC and SEL audits. We found the causes that a qualified opinion has not been expressed were following two in spite of above formal system. First, while it is connected with negative (non-legitimacy) opinion in CC audit to attach qualification to his report as accounting auditor, its qualification reaches positive (qualified fair) opinion in SEL audit as CPA auditor. As a result, opposite audit opinions are expressed in unified double legal audits (CC audit and SEL audit), and it contradicts the harmonization or uniformity of both. Second, if an auditor expresses negative opinion pointing out falsehood in financial statement, the client will be delisted on the basis of stock market delisting provision. Based on above two causes, an auditor does not intend to reach negative opinion, but enforces to transfer n

Author
著者 Matsumoto Yoshinao
著者(ヨミ) マツモト ヨシナオ
著者(別表記) 松本 祥尚
Publication Title
香川大学経済論叢
Volume
68
Issue
2-3
Start Page
499
End Page
528
Publisher
香川大学経済研究所
Published Date
199511
ISSN
03893030
NCID
AN00038281
Resource Type
Departmental Bulletin Paper
Language
eng
Text Version
publisher
Set
香川大学
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