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General |
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On February 15, 2007, the Business Accounting Council finally released its report on the establishment of Standards and Implementation Standards for Evaluation and Auditing
of Internal Control over Financial Reporting (the "Implementation Standards"). |
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Differences with U.S. SOX |
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Similar to the U.S.-SOX, the suggested overall approach for the management evaluation of internal control is a top-down, risk-based approach.
However, the scope of the audit differs. The current US-SOX requires an audit of both the effectiveness of management's assessment of Internal Control over Financial Reporting,
and also a direct audit of the Internal Controls itself. Under J-SOX, the requirement is solely on the audit of the effectiveness of management's
assessment of Internal Control over Financial Reporting.
However, based on the proposed U.S. PCAOB standard, only the direct audit of the Internal Controls over Financial Reporting will be required.
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Effective Date |
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The new Japanese standards require all listed companies in Japan to submit consolidated internal control reports from the fiscal year ending March 31, 2009. |
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