”TOKYO — Aiming to boost investor confidence in Japanese corporations following the Toshiba accounting scandal, the government decided Friday to create a governance code for auditing firms as early as this year.
A research commission for the ruling Liberal Democratic Party will recommend the establishment of the new code by the end of the month. The government will then add the proposal to the larger economic growth strategy to be compiled in June. Later, the Financial Services Agency will put together specific directives.
The new guidelines would come on the heels of the corporate governance codes implemented last year for companies listed on the Tokyo Stock Exchange. But in the wake of Toshiba’s book-cooking scandal, the government decided similar protocols needed to be established for accounting firms. The codes are not legally binding, but companies are asked to provide an explanation if they choose not to follow them…………..”
Source: Nikkei Asian Review – http://asia.nikkei.com/Politics-Economy/Policy-Politics/Japan-set-to-enact-governance-code-for-auditors