2023

INTEGRATED REPORT

Thoughts We Want to Share with the FutureFrom the “Annual Report”
to the “Integrated Report”
As a self-regulatory body for CPAs, the JapaneseInstitute of Certified Public Accountants (JICPA)
has contributed to the Japanese economy andsociety by building public trust. At present,
expectations are increasing for CPAs to resolve
issues not only in capital markets but also in awide range of other fields. Against this backdrop,with 2030 as a future milestone, JICPA has put
forth a vision of continuing to contribute to thedevelopment of society with the power of trust as
the basis to “create a bright future full of comfort
and vitality.”
JICPA has redesigned our report issued eachyear from the “Annual Report” to the “Integrated
Report.” In the Integrated Report, we introduce ourvision and the initiatives to achieve it and share
our hopes for the future with an even broader
group of stakeholders.

Our Vision for
the
JICPA—pioneering the future.
JICPA

INTEGRATED REPORT 2023

01

JICPAINTEGRATED REPORT 2023

CONTENTSThe Perspective of the Integrated Report 2023

04 Message from the Chairman and President

In the Integrated Report 2023, we will introduce JICPA’s value
creation through trust using the analogy of a growing plant.

06 What is JICPA?

NURTUREADVANCECREATESUSTAIN

Nurturing Trust in Society

Advancing into a Bright Future Together

Fulfilling Our Mission in Any Era

Chapter

Chapter

Chapter

Chapter

Explaining the mission and roles CPAs to play,
and their current reality

Sharing JICPA’s history andfuture vision

Reporting on our “Four Pillars”
initiatives to achieve JICPA’s vision

Explaining the system supporting
the operations of JICPA

08 About JICPA

16 The Story of Our Value Creation through Trust

26 Special Feature: Roundtable Discussion

42 JICPA’s Operation

1 0 Our History of Building Trust in Society

18 Special Feature: Dialogue

1 2 CPAs Today

Sharing Our Thoughts on the Contribution of
CPAs and JICPA to Sustainability

22 JICPA’s Ideal Future02

Creating Trust in Society Together with
the People of the World

Editorial Policy

Covered Period

This Integrated Report is part of our communications with
our shareholders. It is issued to provide an integrated
understanding of the social value created by JICPA.
We will continue to work to provide information thatmeets our readers’ expectations.

April 2022 through March 2023
(The Integrated Report includes details onsome activities beyond April 2023)

JICPA

INTEGRATED REPORT 2023

CPAs’ Contributions in the Field of Sustainability

30 “Four Pillars” Initiatives to Fulfill Our Role in Society
30-35

Improving Audit Quality36

 esponding to Growing Needs in the Field
R
of Information Disclosure

37

Strengthening Corporate Governance

48 JICPA’s Financial Summary

38-40 Resolving Social Issues in Various Sectors

Note: The figures provided in this Integrated Report have been rounded off.

JICPA

INTEGRATED REPORT 2023

03

Message from the Chairman and President

DEAR

STAKEHOLDERSJICPA builds trust
by deepening dialogue
with every walk of life insociety and contributes toa sustainable society.

changes, including increasing demands fromsociety for auditing, an increasing number ofhouseholds with both parents working, progressin female empowerment, and the diversificationof value regarding CPA workstyles. We preparedthoroughly and welcomed the promulgation of theamended act with a solid system in place.
Furthermore, JICPA created a new tagline,“Building trust, empowering our future.” It
embodies our strong desire to leverage the trust
placed in CPAs to bring it to a new level in society
and contribute to a better future.
To achieve this goal, in 2022, JICPA published
our “Vision Paper 2022—The Way Forward for
JICPA” to lay out our vision ahead to 2030. As wehead toward 2030, in the three years of my term
in office, we focus on strengthening thefoundation of trust with CPAs, contributing to theresolution of social issues, securing anddeveloping diverse human resources, andstrengthening coordination with stakeholders.

JICPA’s Contribution to Society

JICPA’s Hope for the Futurein Contributing to Society
Tetsuya Mogi, Chairman and President of JICPAThe Japanese CPA system welcomed its 75th
anniversary in 2023. Throughout these 75 years,
JICPA has created value in the form of trust andcontributed to society while evolving with thechanging times.
The year 2022 marked a significant turning
point both for us at JICPA and the CPA industry,even within this long 75-year history.
Above all, the Certified Public Accountants Act
in Japan was amended for the first time in 15
years. The amendments were made to respond to
04

JICPA

INTEGRATED REPORT 2023

In considering how JICPA can continue tocontribute to society, we reimagined the source ofvalue for CPAs.
In the 75 years since the Japanese CPA
system’s establishment, CPAs have cultivatedexpertise and wide-ranging knowledge focusedon accounting, auditing, and taxes and built publictrust through diverse operations, starting withauditing. In this process, CPAs have always
maintained the awareness that self-regulation
with a strong sense of ethics is the foundation ofcreating trustworthy information. CPAs are
required to have a rare combination of not only
expertise and wide-ranging knowledge but also
an autonomous set of high ethical standards. Thisis the source of value for CPAs, and precisely
because of this, they will continue to be relied onby the public.
We are seeing substantial global changes inthe social and economic environment. The
demands for CPAs are also shifting in response,with their fields of activity expanding greatly
beyond the scope of accounting, auditing, andtaxes. Furthermore, digital technology is evolving

at a dizzying pace with the widespread use of new
digital tools like ChatGPT, and the technologicalexpertise required to keep up with this evolution
is growing more sophisticated. By evolving tomeet these changing needs, we will contribute to
the development of society. The field of
non-financial information and sustainability iscurrently receiving the most focus in society andattracting global discussion. As CPAs who haveinstilled trust in information, we will contributeeven more to this field as we move forward.
Moreover, JICPA believes that everyday people
obtaining accounting literacy will help them to live
more abundant, healthier lives, and we have long
worked to expand accounting education and raiseawareness. We see accounting education as aneven more important policy to take in the future
and will work closely with educators to continue
to promote it.

Continuing to Contribute toSociety as CPAs
CPAs will continue to play the important role ofcontributing to the development of economic
society for the public interest. To do so, while
welcoming a diverse group of people to join the
CPA industry, it is essential that we, as CPAs
deepen our individual knowledge and continue torespond to changes in the social environment.
Amid changes in global conditions and the
expected role of CPAs, we aim to continuealigning ourselves with the needs of the times.
We will develop the qualities and capabilities
required of CPAs in an integrated fashion fromthe stage that they pass the CPA examination
through the stage that they are active in diverse
fields.
We CPAs aim to continue to be a presence
that contributes to building a bright future full ofcomfort and vitality even 10 and 20 years down
the line. To achieve this goal, we are pursuing
various policies with a long-term perspective andan eye on the future together with CPAs who aremembers or associate members of JICPA. As we
do so, we ask for the continued cooperation of all
our stakeholders.

JICPA

INTEGRATED REPORT 2023

05

What is JICPA?

PURPOSEJICPA’s Contribution to the Success of CPAs andto the Development of Society

Check!

The Symbol of CPAs
All CPAs are members of JICPA to perform as accounting
professionals, and their symbol is the JICPA membership badge.
The repetition of squares, which evoke stability, represents thecommunity of CPAs who safeguard the stability of economic
society, while the ellipse they form invokes the globe,
representing the pride that CPAs take in protecting
the global economy. JICPA also takes pride in having ourmembership badge seen wherever CPAs are working.

VISION
Creating a Bright Future forSociety Full of Comfort and Vitality
CPAs are expanding their activities into all areas of finance, accounting,taxation, consulting, etc., with a focus on auditing. CPAs who contribute toresolving various social issues and JICPA, which supports them, share thevision for the future. That future is one in which CPAs work together withthe people of the world to provide trust and to contribute continuously tocreating an abundant society full of comfort and vitality.
Check!

Making CPAs a Familiar Presence
In our tagline created in April 2022, “Building trust,empowering our future,” we have instilled our expressed
desire to continue to contribute to the creation of a better
society. In addition to renewing our logo to give it a greater
sense of familiarity, we are working on CPA branding forthem to be seen as a more familiar presence.

06

JICPA

INTEGRATED REPORT 2023

Chapter

One role of CPAs is to express an audit opinion on financial statements
prepared by a company to instill trust in information and, in turn, develop
trust in society. JICPA is here to support CPAs to continue serving this role.
JICPA is the only organization that operates based on the Certified Public
Accountants Act. By maintaining integrity of CPAs and leading them in apositive direction, we continuously contribute to the sound development of
the economy and society—this is JICPA’s mission.

NURTURE
Nurturing Trust in Society

The current reality you may notknow about CPAs
The Japanese CPA system, which has
continuously built trust in information alongwith the changing times, welcomed its 75th
anniversary in 2023. Throughout these 75
years, JICPA has supported CPAs unwaveringly
and nurtured trust in society. In recent years,
the world has experienced progressing
digitalization and the increasingly global andborderless nature of the economy. Against thisbackdrop, expectations for CPAs are greaterthan ever, and their expertise is now in demandin diverse environments. JICPA will continue toprovide our full-fledged support so that CPAs
can flourish in a wide range of fields.

JICPA

INTEGRATED REPORT 2023

07

Chapter 1

About JICPA

Nurturing Trust in Society

JICPA in Numbers

42,637

Members

Associate members

Number of Members andAssociate Members

40,00035,000(As of March 31, 2023)

JICPA’s members are mostly CPAs andaudit firms. Furthermore, associate
members include those who havepassed the CPA examination andthose who have the qualifications tobecome a CPA. As of March 31, 2023,
JICPA had 34,717 members and 7,920
associate members, and we expect thefields in which CPAs are active tocontinue to grow.

30,000

CPAs Today

5,000

25,00020,00015,00010,000

P.12

1950

1960

1970

1980

1990

2000

2010

2020

16.3

2023

0

56

We monitor both daily news reported innewspapers and the information disclosed bycompanies in timely manner. We also haveestablished a hotline related to the work andethics of CPAs through which we receive
external information. At our meetings, we
examine matters brought to our attention
through these sources that risk violating laws
and regulations or company rules and impose
disciplinary sanctions where necessary.
Maintaining a High Level ofSocial Trust in the Work of CPAs

P.31

Supporting the Success of Female CPAs

For the first time in

15

years

The Certified Public
Accountants Act was
Amended (May 2022)

08

JICPA

INTEGRATED REPORT 2023

P.35

The number-one topic in fiscal 2022 was theamendment of the Certified Public
Accountants Act. It was the first amendments
in 15 years since 2007.
For CPAs to continue to be a presence thatbuilds trust together with society, we holddialogues with stakeholders and work tocreate a CPA system that meets the demandsof the times.
Contributing to the Creation of Systems
P.30
that Align with Changing Times

63

firms

Number of Reviewed Audit Firms that Engage
in Audits of Listed Companies (Fiscal 2022)

JICPA regularly checks the status of quality control of the auditing work
performed by audit firms and CPAs that audit listed companies andprovides guidance for improvement where necessary.
Maintaining a High Level of Social Trust in the Work of CPAs

1,215

Percentage ofFemale Members andAssociate Members

We have established a 30% percentage target
for female members, associate members, andthose passing the CPA examination. Since
the first female CPA in Japan in 1951, thecurrent percentage of female CPAs has
passed 16%, and we are furtheringstrengthening efforts to promote the successof female CPAs.

firms

Number of Audit Firms that
Engage in Audits of Listed
Companies (Fiscal 2022)

Number of Times Meetings
were Held for Individual
Cases (Fiscal 2022)%(As of March 31, 2023)

142

times

times

Number of Times Seminars
were Held by JICPA(Fiscal 2022)

48

We hold training sessions for CPAs in a variety
of fields. CPAs are mandated by laws andregulations to attend a minimum number oftraining courses. However, to continue to be
professional partners that build trust together
with society, CPAs also engage in everyday
self-education.
Moving from Training to Skill Development toStrengthening the Adaptability of CPAs

103

times

Number of Times “Hello!
Accounting” Classes
were Held (Fiscal 2022)

P.31

P.34

times

Information
Sessions about the
CPA System (Fiscal 2022)

Total number of participants

Total number of participantsaroundaround

3,500

9,400

To provide a close-up experience with the world of accounting,
we have held our accounting classes “Hello! Accounting” forelementary and junior high school students throughout Japan
since 2005. Through a simulated experience of managing familiar,
everyday businesses such as cake and takoyaki shops, theclasses provide a fun way for children to learn about accounting.

We hold “information sessions about the CPA
system” covering details of the CPA system andthe work of CPAs at high schools and universities.
CPA alumni of the schools visit and share
the appeal of CPA work through their own
personal experiences.

Raising Awareness of the Need for Accounting Literacy

Raising Awareness of the Need for Accounting Literacy

P.39

JICPA

P.39

INTEGRATED REPORT 2023

09

Chapter 1

Our History of Building Trust in Society

Nurturing Trust in Society

The first

JICPA has Evolved Together with Society

1948-

1991-

2007-

2022-

FOUNDATIONREFORMGROWTH

TRANSFORMATION

Building a foundation todevelop together withJapanese society

Reforms to shape
the future of trust

Accelerating the
expansion of operationsin Japan and overseas

To continue delivering
the value of trust
into the future

As the Japanese securities market developed fromthe post-World War II recovery period throughJapan’s high economic growth period, a foundation
was built for the CPA system, and it began to playa role in the development of Japanese society.

As Japanese society matured,
auditing operations were
further strengthened and reformed.

We have supported not only auditing work,
but also other activities of CPAs, who are
expected to contribute to resolving various
social issues.

Amid changes to systems including the rapid
internationalization of accounting and auditing
standards and expanded sustainability
information disclosure, we are responding
with a long-term perspective.

TOPICSTOPICSTOPICSTOPICS

1948 T he Certified Public Accountants Act established1949 The Japanese Institute of Certified Public

1991 Auditing Standards, Working Rules for Fieldwork,

2007 Registration system for listed company audit firms

2022 Creation of the Vision Paper 2022

Accountants founded1953 The JICPA becomes an incorporated association
1966 The Certified Public Accountants Act amended
The JICPA becomes a corporation
1973 Commemorative ceremony and other activities
marking the 25th anniversary of the CPA
system held

1992
1998

1999
2001
2003
2004

and Working Rules of Audit Reporting amended
The Certified Public Accountants Act amended
Continuing professional education (CPE)system launchedCommemorative ceremony and other activities
marking the 50th anniversary of the CPA
system heldAudit firm quality management review systementers into effect
Audit Practice Monitoring Board established
The Certified Public Accountants Act amended
The JICPA becomes a special private corporation

2010
2012
2014
2016

2017
2019
2021

Historical Context

In post-World War II Japan, breaking up the Zaibatsu corporate
conglomerates unfroze and released a large amount of stock
to the public. There was also a nationwide movement todemocratize and create greater awareness surrounding
securities. In 1948, the Securities and Exchange Law wasenacted, and in the same year, the CPA system was born.
The following year in 1949, securities exchanges were openedin eight locations including Tokyo, Osaka, and Nagoya.
10

The current CPA system, which derives from the advent ofregistered accountants based on the Accountants Law of 1927,
was established in 1948 through the Certified Public Accountants
Act. In the 75 years since, it has continued to change and evolve
to meet the needs of the times. Together with changes to the CPA
system, JICPA has worked to build trust in society. At present,
based on our future vision, our goal is to continue to build trust in
the next stage of society.

JICPA

INTEGRATED REPORT 2023

Historical Context

At the end of 1996 in Japan, many reforms to the financial
system were undertaken as part of the “Japan’s Big Bang.”
Through this process, Japan’s financial industry progressedto the next stage. The Tokyo Stock Exchange transitioned
all trading to electronic systems with the goals of
accelerating trade execution, reducing costs, and pursuingstreamlining.

enters into effectThe Certified Public Accountants Act amended
Creation of the Vision PaperTax-related Work Subcommittee establishedProfessional Accountants in Business (PAIB)
Council establishedPublic Accounting Council establishedBasic Accounting Education Promotion Council
establishedWomen in Accounting Professional Promotion
Council establishedCouncil for Accountants Serving as Outside
Directors and Corporate Auditors establishedSelf-Regulation Monitoring Conference established
The JICPA SDGs Declaration

Historical Context

Through multiple amendments to laws and regulations, thecreation of various systems, and economic changes
including Abenomics starting in 2013, the Japanesefinancial market has gradually become more sophisticated.
Furthermore, since the adoption of the Sustainable
Development Goals (SDGs) at the UN summit in 2015,
companies have pursued sustainability in earnest.

The Certified Public Accountants Act amended

Please see P.22–24
for the future of JICPA

Historical Context

People’s lifestyle patterns changed during the COVID-19
pandemic. We live in an age full of dramatic changes indiverse facets of society including digitalization andtechnological progress, environmental problems caused by
global warming, and sustainability.

JICPA

INTEGRATED REPORT 2023

11

Chapter 1

CPAs Today

Nurturing Trust in Society

Number of CPAs (As of March 31, 2023)

34,436Of these, the percentage of CPAs
not belonging to an audit firm is  

Building Trust throughout Society

aroundHistorically, CPAs have been positioned as experts who are responsible for
auditing publicly listed companies. However, within the constantly changing
global economy, the expected role of CPAs is growing even more important.
At present, 60% of all CPAs do not belong to an audit firm and are active indiverse fields starting with tax-related work and management consulting.
Regional
地方創生
revitalization

Tax-related work
By registering as a tax accountant, CPAs can carryout tax-related work. These CPAs prepare and review
tax returns, provide tax-related consultation, and use
their wide-ranging knowledge to provide counsel andadvice in specialized tax-related matters, such as tax
duties related to M&A and international taxation.

Outside社外役員
directors
andcorporate
会計士auditors

Auditing

コンサル
ティング

CPAs provide consultations and advice on all
aspects of corporate management including thedevelopment of management strategies, finding,establishing internal control, IPOs, organizational
restructuring, and financial due diligence.

サステナビリティ

Providing assurances
情報等の保証forsustainability
information

Tax-related
税務
work

Consulting

Consulting

The Mission of CPAs

As experts in accounting and auditing, CPAs ensure thetrustworthiness of information from an independent
standpoint. Their greatest mission is to support the corporate
and economic activities that form the foundation of society.
They have an important role in this mission of contributing to
the resolution of a wide range of issues and supporting thecore elements of society as it constantly changes.

Non-financial
非財務情報
information

地方公共団体、Supporting local
governments
and small
中小企業のand medium-sized
支援等
enterprises

60%

Professional
組織内
Accountantsin 会計士Business(PAIB)

Core operations

Outside directors andcorporate auditors
In corporate management, appointments of outside
directors and outside auditors with diverse
knowledge is increasing. Recently, more CPAs withknowledge of finance and accounting are taking on
the role of outside director.

Standard基準作成
setting
organizations
機関・
andregulatory
規制当局
authorities

Educators
教育者・
and
研究者
researchers
Overseas and
海外・国際
international

企業の海外展開
Supporting
companies’
overseas
支援等

Corporate
会社経営者
management

Professional Accountantsin Business (PAIB)
CPAs work at corporations and other organizations in
the private and public sectors.

expansion

Auditing
CPAs provide audit opinions and ensure the trustworthiness of financial
information from an independent standpoint for a wide range of legal entities
starting with companies and including incorporated educational institutions andpublic interest incorporated associations and foundations.
Main types of audits
implemented by CPAs
 Audits based on the Financial
Instruments and Exchange Act
 Audits based on the Companies Act
 Audits of mutual insurance companies
 Audits of special purpose companies
 Audits of investment corporations
 Audits of limited partnerships
for investment

12

JICPA

INTEGRATED REPORT 2023

Non-statutory audits include
audits of the following:
 Audits of financial statements of companies not
subject to statutory audits
 Special-purpose financial statements

International audits include
audits of the following:
 Companies with shares listed on overseas
exchanges or that are applying for such listing Companies that have procured or seek to procure
funding overseas

Corporate management
In recent years, many CPAs have become involvedin corporate management. For example, after
acquiring sufficient experience as a CPA, somebecome Chief Financial Officers (CFOs) of startup
companies aiming to become publicly listed, andsome become the managers of businesses thatthey start.

JICPA

INTEGRATED REPORT 2023

13

CPAs TodayJICPA Promotes Diverse Activities for CPAs
JICPA has established various councils to support CPAs who are active in a wide range of fields. (As of March 31, 2023)

Members:

5,184

Associate
members:

1,699

494 firms
Target

Women inAccounting
Professional
PromotionCouncilTargetFemale JICPA members andassociate members

Members:

1,698

Associate
members:

1,169

Council for
AccountantsServing as Outside
Directors andCorporate
Auditors

TargetCPAs serving as outside
directors and corporate auditors

2,387

Associate
members:

496

JICPA

Tax-related
Work Council

TargetCPAs who are employees ofcorporations

Members:

8,917

Associate
members:

6,066

TargetCPAs who performtax-related work

Professional
Accountants in
Business (PAIB)
Council

Professional Accountantsin Business (PAIB)
Network
Members:

Small andMedium-sized
Audit Firm
LiaisonCouncil

Chapter

Accountants Serving as
Outside Directors andCorporate Auditors
Network

Small and medium-sized
audit firms that audit listedcompanies

PublicAccounting
Council

Local Government Body
Accounting and Auditing
Subcommittee

Regional Public Entity
Accounting and
Auditing Working Group

Members:

2,722

Members:

709

Associate
members:

92

Associate
members:

2,266

TargetCPAs working in not-for-profit and public sectors

ADVANCE
Advancing into a Bright Future Together

COLUMN

Let’s Get to Know the CPAs who are Active
in a Wide Range of Fields!

JICPA’s goal is to share the reality of CPAs being active in many
fields and have you understand the appeal of working as a CPA.
To achieve this goal, we have created various pamphlets and online
contents to provide interviews with CPAs active on the frontlines ofauditing, those contributing to the SDGs, and those active overseas,
as well as the experiences of people who pass the CPA examination.
Please visit the below links to access this information. We would
love for you to understand the appeal of working as a CPA indiverse fields.
Pamphlet (In Japanese)

https://jicpa.or.jp/cpainfo/introduction/publicity/
Interviews with CPAs (In Japanese)

https://jicpa.or.jp/cpainfo/interview.html

14

JICPA

INTEGRATED REPORT 2023

Envisioning a sustainable society
together with you

Pamphlet

CPAs are now called on to respond to a
dynamically changing world, including
digitalization, technological progress, andenvironmental issues such as global warming.
To ensure trust in the coming future, JICPA is
to further enhance audit qualities performed
by CPAs. We are also focusing on developing
the personnel that will serve the role. Throughour efforts, JICPA aims to utilize the power of
CPAs to aid in the creation of a sustainable
society and to realize “a bright future full ofcomfort and vitality.”

WebsiteJICPAINTEGRATED REPORT 2023

15

Chapter 2

The Story of Our Value Creation through Trust

Advancing into a Bright Future Together

JICPA has prepared our Vision Paper 2022 so that we may provide long-term value
to society in response to the many changes in the operating environment
surrounding CPAs. As part of our goals in the Vision Paper 2022, we are particularly
focused on realizing the “four pillars” as we aim to contribute to society.

JICPA

SOURCE

DIRECTIONOUTCOME

IMPACT

Source ofvalue creation

Direction (Vision)Roles performed
for society

Impact on society

A foundation to build
trust in the information
infrastructure of society

Building trust,empowering our future

Improving audit quality

Social credibility
A broad-based organizationthat acts as the
only self-regulatory
body composed of CPAs

Human resources
Members and associate
members with diverse work
experience and a network ofinternational organizations
centered on auditing
The JICPA staff that supports
the above members andassociate members

Knowledge
Starting with 75 years ofexperience overseeing Japan’s
auditing, rich knowledge
gained by ensuring thetrustworthiness of information

Diverseoperations

Auditing

INTEGRATED REPORT 2023

Increasing the trustworthinessof information disclosed
by companies

Responding to growing
needs in the field of
information disclosure
Improving disclosure that meetsthe needs of the times
for both financial andnon-financial information

Developing the trustworthy
disclosure of sustainability
information
Realizing enhanced corporate
value and the creation ofa sustainable society

P. 36

JICPA

Four pillars with an eye on 2030

Strengthening
corporate governanceSupporting stronger corporate
governance aimed at enhancing
corporate value

Energizing economic activities
and enhancing Japan’sinternational standing

P. 37

Encouraging innovationin the economic society
by promoting digitalization

Contributing to the resolution of social issues
by expanding operations

Resolving social issues
in various sectors

Securing and developing the diverse humanresources responsible for the information
disclosure ecosystem

Contributing to economic
development through support
for regional revitalization andpromoting accounting education

Spreading accounting
literacy

Improving and strengthening the foundationof auditing and assurance that provide
infrastructure capabilities for capital markets

Increasing management resources
JICPA

Strengthening the auditing
foundation and improving
the understanding andappeal of auditing
P. 30–35

Strengthening coordination withstakeholders

16

Society

Vision“A bright
future full ofcomfort andvitality”

P. 38–40

Increasing trust from society
JICPA

INTEGRATED REPORT 2023

17

Chapter 2

Special Feature: Dialogue

Advancing into a Bright Future Together

Sharing Our Thoughts on theContribution of CPAs and
JICPA to Sustainability
Chairman and President of JICPA

Tetsuya Mogi

Director and Deputy President,
Daiwa Securities Group Inc.

Keiko Tashiro(Titles of respect omitted below)

Education as the Premise of Sustainability

18

JICPA

INTEGRATED REPORT 2023

important in spreading this awareness.
Tashiro I do not believe that anyone thinks that they
are unrelated to the SDGs. At financial institutions
such as ours, our core work is related to SDGs.
From first-year employees to senior employees toeveryday people, the SDGs affect everyone. That is
why it is essential to understand the SDGs andmake them a personal priority. I believe that this is
the case at JICPA, but the first step at any financial
institution or organization is sharing theunderstanding that the SDGs are a framework thateveryone must pursue together.
JICPA’s Role in Contributing to a
Better Way of Life
Mogi People living a better quality of life isanother element in providing education on the
SDGs. Accounting education is where we as CPAs
can best exercise our expertise in the realm of
education. As an initiative in the field of educationthat is part of the fourth goal of the SDGs, we haveoffered our “Hello! Accounting” educational
program to young people. I am sure that as amember of a securities firm, financial education issomething that you think about. How do you feel
about the current state of financial education in
Japan, including accounting education?
Tashiro Starting several years ago, with the news
that seniors would need ¥20 million in addition totheir public pension to retire, more people havebecome aware of the need for financial education. I
believe that part of the reason was that, until thatpoint, there had not been that much financial
education in Japan. For example, teachers havehesitated to talk to children about money in school.
There are many reasons that financial education
has not progressed in Japan, and the solution tothis problem is still incomplete. The most important
things are to understand that there is knowledge
that you must acquire, and then to act on.
Mogi That is true. While accounting information
has come to be included in the Japanese curriculum
guidelines for junior high school and high school,
even a few years ago, some said that talking aboutmoney like we do in “Hello! Accounting” was not
appropriate for in-school education. I do believe thatthe situation has improved, and that people
understand that their quality-of-life changes
JICPA

DIALOGUE

In addition to Daiwa Securities Group Inc.,
Ms. Tashiro is active in fields adjacent to the workof JICPA, including her role as Member of the Board
and Deputy President of the Japan Association of
Corporate Executives, Member of the Working
Group on Corporate Disclosure at the FSA’s
Financial System Council, and Trustee of the IFRSFoundation. In all these positions, she is involved
with the expectations of society for sustainability,
the actions of companies based on these
expectations, and the related investment activities,
all of which form the basis of corporate
sustainability. I have also heard that she firstbecame involved with the SDGs in her work in 2008
selling so-called vaccine bonds to individual
investors for the inoculation of children indeveloping countries. She is a pioneer going back15 years in what it means to implement the SDGs.
Ms. Tashiro, what do you now feel are thesustainability initiatives demanded by society, andwhat issues do these initiatives face?
Mogi

Tashiro I do not believe that there is anyone who isagainst the creation of a sustainable society.
However, many people do not believe thatsustainability can be realized with the current
approaches. For example, in terms ofenvironmental issues, the global environment ispredicted to be at risk by 2050 if we continue ourpresent course. Initiatives to avoid these risks
require large sums of money. For a large financial
institution like the Daiwa Securities Group, there is
the big issue of not knowing where these funds
should be directed. For this reason also, I believethat information disclosure is essential. Ensuringthat as many people as possible have the proper
understanding of our current reality is also
important. The smallest unit of any social endeavor
starting with corporate activities is the individual. In
that sense, education also has a large role to play.
Mogi I am in total agreement. In 2021, JICPA
announced “The JICPA SDGs Declaration,”pledging that “As a professional partner, we will
nurture trust, create a prosperous society, and build
a brighter future.” In our declaration, we identified
eight fields in which CPAs can make meaningful
contributions. I also believe that education is

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Chapter 2

Special Feature: Dialogue

Advancing into a Bright Future Together

pursue what we can provide to society andwhat society expects of us.

DIALOGUE

20

JICPA

depending on their knowledge of accounting. I
recently had the opportunity to speak to a woman
who became a CPA and asked her why she decided
to follow that path. She had previously worked in
the staffing industry. When the staffing company
assigned workers to companies, the conditions of
employment were always different depending onwhether accounting could be performed. Based on
this experience, she studied to join the world of
accounting. We must properly communicate that
there are differences based on the capabilities
acquired by the individual.
Tashiro Students’ feelings on employment havechanged compared to the past, and I believe that
more students are prioritizing fields in which they
have a personal interest. As a result, the nature ofcompanies including their approach to public listing
may also change.
Mogi Most CPAs initially join an audit firm after
passing the CPA examination. When I first began
working 30 years ago, some people did not evenknow what an audit firm was. However, overseas
we now have many countries where accounting
firms are at the top of the rankings of desired jobs
among students. While not yet to the extent ofoverseas, Japan is also seeing more students whowant to work at audit firms.
Tashiro After I joined a securities company, one of
our first training sessions was a bookkeeping test,
but I honestly had very little experience withbookkeeping at that time. Interestingly, afterworking overseas and returning to Japan, I became
responsible for investor relations. While I was
INTEGRATED REPORT 2023

familiar with funding mechanism through mydocumentation work with stocks and bonds, being
responsible for IR gave me an even greater
understanding of the importance of financial andaccounting disclosure as the foundation forinvestment decisions. While I understood funding
and financial management from the perspective ofa single company, this experience made me
consider what meaning these had to the greater
society. This was also when I became more awareof the importance of information disclosure.
Mogi We need to spread this kind of awarenessof the role of corporate information disclosure
throughout society.
The Sustainability of Society
Supported by CPAs
Mogi You are part of many initiatives aimed at
the disclosure of non-financial information
including sustainability information starting withyour work as a Trustee of the IFRS Foundation.
What are the current issues that you see withsustainability disclosure?
Tashiro Because the approach to sustainability
disclosure varies by company, a large issue isintroducing statutory disclosure. From thestandpoint of competitiveness also, regional
comparisons with Europe, the U.S., and Asia
naturally arise. Another difficult problem is deciding
which countries to include when integrating
sustainability disclosure globally.
Mogi I believe that the issue of being able orunable to meet the demands of information
disclosure depends on a company’s or country’s
stance on the topic. One signal is that if datacannot be collected, that company or country will
have a weak understanding of the given topic. In
order for the company or country not to be seen as
having a weak understanding externally, at a
certain point they need to create a system toproduce the appropriate information.
Tashiro In terms of initiatives that are alreadyunderway, for example, the amount of diversity in aboard of directors is already an issue. In anotherone or two years, I believe that companies without

a single female director may see objections fromtheir shareholders and have their chairperson not
be reelected. Similarly with environmental issues,
Japan has set a goal of achieving carbon neutrality
in which overall greenhouse gas emissions are zeroby 2050. As we approach that deadline, the sensethat time is running out is becoming more andmore intense.
Mogi That is true. As CPAs, we are involved withcompanies in many layers of society, and many
companies still feel that these discussions are only
for big businesses. However, these are issues that
all companies must face when considering how tocontinue being successful in the supply chain.
Tashiro The response would be different between
companies that are essential to society andcompanies that are just “one of them.” From thestandpoint of big businesses, we already live in areality where they cannot use products or services
from companies without concern for theenvironment.
Mogi When companies lack sufficientunderstanding surrounding these issues, I believethat an important role for us as CPAs who provide
proposals and advice to management is to createawareness of these issues.
Tashiro Scientific technology is advancing. It used
to be difficult to make environmental forecasts, butusing the wide range of data available to us now,
we can produce forecasted values. Some corporate
managers make the decision not to take action on
environmental issues simply because they areunaware of this technological progress. Filling thisgap is exactly what CPAs are capable of doing.

create new trust through our involvement. One ofour biggest future goals is to provide some kind ofvalue to information disclosure related tosustainability. Ms. Tashiro, what do you believe is
expected of CPAs?
Tashiro Whether it be finance or sustainability, what
is most important is that the figures certified by
CPAs have absolute reliability. For investors looking
to make investment decisions, without the disclosureof reliable figures, overall society becomes morechaotic. As such, CPAs have a key function inmaintaining order. Moreover, corporate value iscreated by a wide range of stakeholders inside andoutside of the company. While finance has made up
most of this value thus far, sustainability information
will be added. CPAs are expected to contribute tomeaningful information disclosure that allows
investors to gauge corporate value.
Mogi We are constantly working to understandwhat society expects of us and what we canprovide to society. Human resource development isextremely important in this process. In terms ofsustainability, we still need to expand ourknowledge in certain areas. While proactively
incorporating the knowledge of external experts,
we are creating educational programs andpromoting skill development.
I would like to thank you for your valuable time
today.
Tashiro Thank you as well.

DIALOGUE

We are constantly working to understand and

CPAs are Expected to Build Trust
Mogi In reality, CPAs performing audit at audit
firms make up just more than 40% of all CPAs.
Around half of CPAs are company employees,
advisors, researchers, educators, and those whowork mainly with taxes. I believe that you have
CPAs who work at your company as well. However,regardless of where and what type of work they
perform, the shared value of us as CPAs is to

To understand the SDGs and for people to makethem a personal priority, the first step is sharing
the understanding of why they should be pursued.
JICPA

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Chapter 2

JICPA’s Ideal Future

Advancing into a Bright Future Together

Phase

The Path to Our Desired Future

Source of Value Creation

To continue to build trust in line with the nature of society in each era, JICPA aims to realize“a bright future full of comfort and vitality.” On this page, we introduce our value creation story.

1

2
Society

SOURCE

DIRECTIONOUTCOME

IMPACT

Source ofvalue creation

Direction (Vision)Roles performed
for society

Impact on society

A foundation to build
trust in the information
infrastructure of society

Building trust,empowering our future

Improving audit quality
Increasing the trustworthinessof information disclosed
by companies

P. 30–35

A broad-based organizationthat acts as the
only self-regulatory
body composed of CPAs

Diverseoperations

Auditing

Human resources
Members and associate
members with diverse work
experience and a network ofinternational organizations
centered on auditing
The JICPA staff that supports
the above members andassociate members

Strengthening the auditing
foundation and improving
the understanding andappeal of auditing

Responding to growing
needs in the field of
information disclosure
Improving disclosure that meetsthe needs of the times
for both financial andnon-financial information

Developing the trustworthy
disclosure of sustainability
information
Realizing enhanced corporate
value and the creation ofa sustainable society

P. 36

JICPA

Four pillars with an eye on 2030

Starting with 75 years ofexperience overseeing Japan’s
auditing, rich knowledge
gained by ensuring thetrustworthiness of information

Supporting stronger corporate
governance aimed at enhancing
corporate value

Energizing economic activities
and enhancing Japan’sinternational standing

P. 37

Encouraging innovationin the economic society
by promoting digitalization

Contributing to the resolution of social issues
by expanding operations

Resolving social issues
in various sectors

Securing and developing the diverse humanresources responsible for the information
disclosure ecosystem

Contributing to economic
development through support
for regional revitalization andpromoting accounting education

Spreading accounting
literacy

Improving and strengthening the foundationof auditing and assurance that provide
infrastructure capabilities for capital markets

Knowledge

Strengthening
corporate governance

Strengthening coordination withstakeholders

Increasing management resources

Vision“A bright
future full ofcomfort andvitality”

Increasing trust from society

Summary of Our Value Creation Story

Phase

1

Phase

2

Phase

3

22

JICPA

Source ofValue Creation

Based on the mission of building trust in the information
infrastructure of society, JICPA was established through theCertified Public Accountants Act. The source of our value in realizingthat mission is social credibility, human resources, and knowledge.

Direction of
Our Vision

Recognizing the changes in society, we will carry out our “fourpillars” management policy over the coming three years. By
contributing to the resolution of social issues, we aim to make apositive impact on society.

VisionWe will make contributions that help shape the future of society.
Our organization will lead the creation of our vision of “a bright
future full of comfort and vitality.”

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Phase

The source of CPAs’ value creation

ExpertiseBroadknowledgeHighethicalstandards

Social credibility
Human resources
Knowledge

The source of JICPA’s value creation2

Direction of Our Vision

P. 38–40

JICPA VALUE CREATIONJICPA’s role and mission
The source of CPAs’ value creation is theirexpertise, broad knowledge, and high ethicalstandards. The value of CPAs is to build trust insociety and provide people with comfort even amid
increasing uncertainty over the future. JICPA’s role
is to support the creation of that value. Our social
credibility has been developed by JICPA as the only
self-regulatory body composed of CPAs as
members. Our human resources are the CPA
members and associate members and the JICPA
staff who support them. And finally, our diverse
knowledge has been developed over the course ofmany years. With these three elements as thesource of our value creation, JICPA contributes tothe resolution of social issues.

3

JICPA

Social credibility

1

Our “four pillars” of focus in ourmanagement policy
Based on our tagline, “Building trust, empowering
our future” JICPA supports the work of CPAs active
in a wide range of fields. We see the roles that
JICPA must fulfill to provide value to society as“Improving audit quality,” “Responding to growing
needs in the field of information disclosure,”“Strengthening corporate governance,” and“Resolving social issues in various sectors.” With
the four important themes to the right, our “fourpillars,” as initiatives that connect to these roles,
JICPA will work to resolve issues together with our
stakeholders. Through the four pillars, we will work
to fulfill the role demanded of us by society and to
maximize the value that we can provide to society.

JICPA VALUE CREATION

Four pillars with an eye on 2030
Improving and strengthening thefoundation of auditing and assurance
that provide infrastructure capabilities
for capital markets
Contributing to the resolution of social
issues by expanding operations
Securing and developing the diverse
human resources responsible for the
information disclosure ecosystem
Strengthening coordination withstakeholders

Our role in society

JICPA

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JICPA’s Ideal Future

Phase

3

JICPA VALUE CREATIONJICPA’s desired direction

VisionJICPA’s vision is to act as part of the social infrastructure that
contributes to the public interest and leads social transformation.
Through dialogue with diverse stakeholders in Japan and abroad,we are deepening coordination and quickly capturing social changes.
With an even more long-term perspective through 2030, we willcontribute to shaping the future. Our aim is to be an organization that
leads the creation of “a bright future full of comfort and vitality.”

 Rising interest in sustainability (growing
movement toward respect for diversity)
 Socioeconomic globalization
 Digitalization
 Continued increase in the number of listedcompanies despite their stagnant growth

 Expansion of social needs
 Growing importance ofdeveloping andmaintaining credentials
and skills, as well as
retaining talent

Chapter

Changes in the environment around CPAs

Response to changes in the environment around CPAs
 The value provided by CPAs
 Future visionExpanding sphere of CPA activity
Reevaluating auditing work
 Approach to realizing the future vision

Reinforcing the functions of JICPA

Initiatives related to enhancing
and securing professional
excellence among CPAs

Initiatives related tothe branding of CPAs and
JICPA eveloping and maintainingD
credentials and skills
Reinforcing auditing infrastructureReinforcing professional regulatory
functions
Reinforcing support for diversifying
member activities
Globalization

 Reinforce policy proposal functions
 Reinforce the CPA brand and expand
communications
 Stakeholder engagement
 Reinforce crisis management functions

Initiatives related to
institute operations
 Sustainability initiatives
 The relationship between regional
chapters and Headquarters:
Working together to strengthen
institute activities
 Responding to digitalization
 Enhancing productivity andtransparency in institute operations

Let’s Get to Know
Sustainability at JICPA!

The JICPA SDGs Declaration“SDGs” that leave nobody behind—we often hear about this concept.
In July 2021, JICPA created “The JICPA SDGs Declaration.” Its threepillars, “Economy,” “Society,” and “People and Environment,” act topass the baton along to future generations.

As a professional partner,
we will nurture trust,create a prosperous society, andbuild a brighter future.

COLUMNCREATE

Creating Trust in Society Together with
the People of the World
What we can do now
to shape our ideal future
What JICPA can do now—is our “four pillars”
of initiatives; “strengthening auditing andassurance services,” “resolving diverse social
issues,” “securing and developing personnel,”and “coordinating with stakeholders.” JICPA’s
management policy is focused on addressingthese four issues. To respond to socialchanges, JICPA will continue to create trust insociety together with the people of the world
and resolve the issues in our four pillars. We
believe that realizing our vision awaits us on
the other side of these actions.

JICPA’s Efforts Toward the Realization of a Prosperous Society P.40

24

JICPA

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JICPA

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Chapter 3

Special Feature: Roundtable Discussion

Creating Trust in Society Together with the People of the World

From left to rightTakeshi Mizuguchi
President, Takasaki City Universityof Economics

Tomoko Tsuruno
Senior Advisor, CSR Design Green
Investment Advisory, Co., Ltd./CPA

Jun Goto
Managing Director, Deputy Head of
Credit Rating Division, Head ofCorporate Finance Dept. IV, Rating
and Investment Information, Inc./CPA

Takako Fujimoto

CPAs’
CPAs’ Contributions
Contributions(Facilitator)
Deputy President, JICPA/Partner,
Deloitte Touche Tohmatsu LLC

inin thethe Field
Field ofof Sustainability
Sustainability(Titles of respect omitted below)

Recently, the demand for sustainability in society has been increasing, and CPAs are now expected to makecontributions in a wide range of fields. For this roundtable discussion, we invited several experts
who are active on the frontlines of sustainability to discuss the expected roles of CPAs in the field ofsustainability while also referencing their careers of CPAs thus far.

CPAs are Active in
the Field of Sustainability
Fujimoto Regarding sustainability,
going forward we will be evaluating
both disclosure and assurance. Aspart of this process, today wegathered professionals who haveaccumulated high levels ofknowledge and been active in thefield of sustainability throughout
their careers to share their thoughtson this topic.
Mizuguchi I currently serve as the
President of the Takasaki City
University of Economics, but before
working at the university, I worked as

26

JICPA

INTEGRATED REPORT 2023

a CPA. I am now involved in thedisclosure of non-financial
information and research into
sustainable finance. I also serve as
the Chair of the Ministry of theEnvironment’s Working Group on
Green Finance and the FSA’s Expert
Panel on Sustainable Finance.
Tsuruno Since I began working inaccounting audits around ten years
ago, I developed an interest in
sustainability and now work at CSR
Design Green Investment Advisory. I
study international trends insustainable finance, report myfindings to government offices andcompanies, and provide advisories
on the disclosure of corporate
sustainability information.

I currently work as a credit
analyst at Rating and Investment
Information, Inc. (R&I). In recent
years, there have been more
examples of ESG (environmental,social, and governance) factors
impacting credit ratings. As such, I
provide opinions from the standpointof an analyst externally and am
involved in improving a system toreflect ESG factors appropriately incredit ratings internally.
Fujimoto As sustainability has begun
to be more strongly emphasized anddiscussion on the nature of corporate
reports progresses, I have provided
opinions as part of my work withJICPA. Ms. Tsuruno, you also are amember of the International
Goto

Financial Reporting Standards
Foundation’s (IFRS) International
Sustainability Standards Board’s(ISSB) Working Group, correct?
Tsuruno That is correct. The Working
Group has members from a variety ofindustries including pharmaceuticalcompanies, human resourcecompanies, and financial institutions,and I find the work extremely
stimulating.

Beginning of Interest in
Sustainability
Looking at society overall in
recent years, I believe that theimportance of ESG is changing.
Discussion on disclosure is now
moving forward, and there isincreasing interest in Japan in the
topic of carbon neutrality. You all
Fujimoto

have been involved withsustainability for quite some time,and I would like to ask how you firstgot started.
Mizuguchi The Exxon Valdez oil spillin 1989 led to the start of a
discussion that it was extremely
beneficial for investors to focus on
the environment when investing.
There was a move toward socially
responsible investment in the U.S. at
the time, and I was involved in
introducing to Japan the concept thatcare for the environment and society
should be included in investment
decisions. I got to know an
accountant who was extremely
passionate about working withenvironmental issues at the time.
Through this person’s initiative,
JICPA formed a working group on
environmental auditing at its
Management Research Committee,
and I became a member. From there,
the working group’s activities
expanded from environmental
auditing to environmental accounting
and sustainability information, which
led to JICPA’s current activities.
Fujimoto The flow of these
discussions has led us to today. The
disclosure of sustainability
information is now in focus, and thepeople around me say that JICPA’s
initiatives are truly progressing. I
believe that this is mainly because
the research initiatives and results
are spreading to those around us.
Mizuguchi At each audit firm, there
are some who have long beenpassionate about sustainability. The
people at the center of eachsustainability division have gathered
at JICPA and taken part indiscussions that go beyond theconfines of a firm. I believe that thisis what has led us to today.
Tsuruno These are the people whohave created the history ofenvironmental accounting for Japanand JICPA. In 2010, I was at a turning
point in my life. My husband wasplanning to study abroad in England,
and I thought that it was a good
opportunity and decided to study
with him. My major was inaccounting, and when we were given
the topic of environmental
accounting and I was reading
literature on the subject, I

encountered the idea of changing
social awareness throughaccounting. It said because investors
evaluate companies only withfinancial information, companies arefocused on generating profit. I thinkthat corporate behavior will change
when companies disclose
environmental and social content
together with financial informationand investors evaluate companies
using the all the information. From
the time that I first read this idea, I
have always wanted to create a moresustainable society through the fieldof accounting.
Mizuguchi With changes in social
structures, trends in environmental
issues also change. Because
accounting is part of the foundationof social structures, it has anextremely large impact.
Goto It seems that everyone here
first became interested in ESG froman environmental perspective, but
my involvement in work relating to
the “G” in “ESG,” governance, was
how I first became involved. The UN
first issued its Principles for
Responsible Investment (PRI) in
2006. As an awareness of theelements of ESG in investment was
being encouraged and corporate
governance was being enhanced inJapan, I began to consider how
governance assessments could beincorporated into the process ofkTae sh iM iz u g uchi

We need to understandthat changes in investment
encourage changes in

information disclosure.
MizuguchiJICPA

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27

Chapter 3

Special Feature: Roundtable Discussiono ko Ts u r u noTo mI would like to create amore sustainable society
from the field of
accounting.

Tsurunorating companies. Since 2018, when
the PRI began to encourage
environmental and social factors to
be considered in evaluatingcompanies, my work shifted tooverall ESG.
Fujimoto Is it difficult to quantify
governance for inclusion in corporate
evaluations?
Goto Yes, some parts of governanceare difficult to quantify. Ratings entail
a comprehensive evaluation ofqualitative factors such as the sales
platform, production system, andbusiness portfolio, as well as
quantitative factors from financial
analysis. Governance is evaluated asa qualitative factor in business risk.
If governance is functioning properly,
the idea is that uncertainty
surrounding cash flow can be limited.
Mizuguchi Of course, if governance isfunctioning properly, cash flow willstabilize over the long term. However,
the issue is how to tell whether
governance is indeed functioning.
Can this be determined only frominformation disclosure?
Goto You are exactly right. Ourstrength as a rating company is ourability to visit companies and speakwith top management to evaluate
their current governance system andconfirm its actual operating
conditions. We may ask whether
active discussion has taken placewith the outside directors. We look
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Creating Trust in Society Together with the People of the Worldnot only from the outside, but also
starting from an understanding of thecompany’s culture, we confirm
whether an organizational climate isin place for governance to function
and include this in our evaluation.
While governance has a real-time
impact on management that can beseen immediately in some parts, thetimeline for environmental and social
factors is extremely long. It is difficult
to predict what kind of impact thesewill have over the long term, which
can make evaluations difficult.
Because financial disclosure
information is limited at this time,these are mainly included
qualitatively. For example, in theautomotive industry, because
companies are responding promptly
to environmental issues andcontributing to the stability of their
future cash flow, their actions areincluded in their rating as positive
evaluations of the competitiveness of
their products and their technicaldevelopment capabilities.
Fujimoto I have also been interested
in corporate management since I
was a university student. During mytime at university, I studied ourcurrent topic, how to quantify
qualitative information for use inmanagement analysis. We makeassumptions while performing ourevaluations, but there are indeed
difficulties in this process.
Goto That is correct. Rather thanscoring, in forecasting futurefinancial statements, the sense ofstability in cash flow is incorporated
in the evaluation. However, because
we always want to directly forecast
the amount of investment or amountof impact where possible, many
analysts are calling for improvement
in quantitative disclosure. Because
more and more investors arefocusing on a proactive attitude
toward ESG, the disclosure content
that they demand may also change.

What CPAs canContribute to Sustainability
I am sure that CPAs allunderstand the purpose of
information disclosure, but in
Mizuguchi

general, there are those who wonder
why disclosure is required to thisextent. In terms of our social
structure, if we do not have markets,then we do not have capitalism. To
establish markets, information that
forms the basis of our decisions andallows us to transact with a sense of
comfort is required. As we move
forward, not only accounting
information on sales and profit, butalso information on sustainability will
become more and more important inthis process.
Tsuruno The reason of sustainability
information disclosure is thatinvestors want to know how it affects
both corporate value and financial
information. This is the same
approach taken by the Task Force on
Climate Related Financial
Disclosures (TCFD) that encourages
the disclosure of climate-related
information that affects finances.
Because knowledge of accounting isa premise for understanding therelationship between sustainability
information and financial information,
this is an area in which CPAs can
exercise their strengths.
Goto Because the approach ofsustainability to address issues
resembles the approach of auditing,
CPAs are well suited to this field.
Sustainability issues take the same
approach as the risk-based approachtaken in performing an audit, inwhich the business environment andbusiness model must be understoodand the risk management framework
confirmed, is the same approachtaken to sustainability issues. In thisway, CPAs already have thenecessary qualities to handle
sustainability issues. Sustainability isa field that requires extreme
expertise. Naturally, at first it will be
the people at the companies who will
have the most knowledge and theCPAs who will be in a learning
position. However, after they gain
experience with tens or hundreds ofcompanies, ultimately the CPAs will
be able to form their own opinions
and provide advice.
Fujimoto The question is whether
CPAs can really provide sustainability
assurances. However, the sameassurances have been provided inaccounting audits through thecontents of disclosure standards, thestructures to develop standards, andthe accumulation of processes to
impart trustworthiness.
Mizuguchi CPAs who talk to corporate
management understand theirbusiness. These CPAs must acquire
the same broad knowledge ofsustainability in the future. Because
the world is growing more
complicated, sustainability issues
facing management are also diverse,
and CPAs must have a deep
understanding of a range of issues
including decarbonization and humanrights.
Tsuruno Accounting knowledge canbe utilized in sustainability, but totackle sustainability issues, it isextremely important that not only the
CPA industry, but also a wide range
of industries work together. Given
the diverse range of social issues, it
is difficult to understand them all. It
is extremely important therefore forpeople from different industries tojoin forces and to communicate with
one another.

What will be Demanded of
CPAs in the Future
Mizuguchi Opinions are divided on
many topics in the world, and there

Ju n G ot o

My hope is for CPAs tobecome active in the fieldof sustainability without
neglecting the auditsthat act as the foundation.
Goto

are many things for which we do notknow who is right. That is precisely
why it is necessary to gather diverse
opinions. When talking to corporate
management, it is extremely
important to be familiar with outside
opinions.
Tsuruno At my present company,
there are people from many
specialized fields, and we holdregular workshops. In talking topeople from diverse fields, we areable to deepen our understanding ofmany topics that we were unable tounderstand only reading articles.
This is why it is important to shareopinions with as many different
people as possible.
Goto Sustainability issues cannot all
be resolved by one person. Becauseof this, issues that require a Japanwide solution must be tackled bytaking on different roles. I would liketo contribute to the resolution ofsustainability issues throughout
society in fields adjacent to financial
reporting. My hope is for CPAs tobecome active in the field ofsustainability without neglecting theaudits that act as the foundation.
Mizuguchi The role of CPAs isexpanding even further. On the other
hand, we now have generative AI,
and it is forecasted that routine work
may be gradually replaced bymachines. Auditing work is alreadybeing digitalized. When thinking ofwhat new value CPAs can provide, or
what value cannot be replaced bymachines, one answer is the valuethat can be produced in the new fieldof sustainability. The field ofsustainable finance is also starting to
grow. The investors who read
information disclosures are alsochanging. Particularly with European
investors, we are starting to see a
big shift in their values. CPAs mustalso understand that these changes
in investors are what encouragechanges in information disclosure.
Tsuruno Sustainability is not only atrend among big businesses, but also
is an area that small and mediumsized businesses must address. As
such, the CPAs who are involved withsmall and medium-sized businesses
in various facets also need to be able
to support decarbonization initiatives.
Big businesses will also start tokaTako Fu j i m o toSustainability is

one form of new valuethat can be provided
by CPAs.

Fujimoto

demand the disclosure ofgreenhouse gas emissions data fromthe vendors in their supply chains.
Given Japan’s goal of achievingcarbon neutrality by 2050, theresponse of small and medium-sizedbusinesses is also essential. I hopethat CPAs will utilize their fields ofexpertise to contribute to asustainable society throughout theentire industry.
Fujimoto I also hope sustainability
information is circulated to the CPAs
at small and medium-sized audit
firms responsible for auditing small
and mediums-sized companies. I
would ask for the understanding andcooperation of the members of
JICPA’s regional chapters incoordinating with regional financial
institutions and local government
offices to expand sustainability
activities. No matter the industry or
scale, all companies are connectedto the value chain, and everyone
involved is in the same situation. I
would like to create an environmentof mutual support with everyone.
Today’s valuable discussion witheveryone involved with sustainability
was extremely informative. Thankyou very much.

JICPA

INTEGRATED REPORT 2023

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Chapter 3“Four Pillars” Initiatives to Fulﬁll Our Role in Society

Creating Trust in Society Together with the People of the World

Maintaining a High Level ofSocial Trust in the Work of CPAs

Shaping Future Society by Implementing Our “Four Pillars”
JICPA’s policy is to provide value to society (outcome) by implementing
our “four pillars” aimed at realization of our vision.
Here, we will introduce the main initiatives under our “four pillars.”

Contributing to the Creation of
Systems that Align with Changing Times
Certifications for CPAs are established by the Certified
Public Accountants Act and are amended to align withsocioeconomic conditions. The last set of amendments wasin 2007, and since then, corporate activities have further
globalized, technological innovation in such areas as ICT and
AI has advanced, and socioeconomic conditions havechanged dramatically. In terms of auditing, the exclusive
purview of CPAs, with corporate operations growing more
complex, new standards have been introduced with
amendments to accounting standards, and decisions on
accounting estimates are growing more complex. Auditing
systems are also being adopted in systems for certain

Improving audit quality
OUTCOME

Strengthening theauditing foundation

non-profit entities and need for assurance services otherthan financial statement audits is increasing. In this way,
given the expanding role of those responsible for auditing
listed companies, as well as changes in the socioeconomic
conditions surrounding auditing such as increasing diversityand varying work styles, the amended Certified Public
Accountants Act was promulgated in May 2022.
JICPA participated in the discussion on the amendments
to the Certified Public Accountants Act, and in addition toforming a cross-functional project team, we reviewed oursystem and established operational management rules
ahead of the promulgation of the amendments in April 2023.

As the organization responsible for constantly maintaining
high-level credentials for CPAs, JICPA provides guidance,
communication, and oversight to CPAs to ensure society’s trust in
their work. As forms of self-regulation to maintain and improve
the level of quality of CPA work, there are three processes inplace. The first is the individual case review of the status of
implementation of individual audits and the validity of the audit
opinion, as well as a review of the professional ethics of theindividual CPA. The second process is a quality control review thatprovides guidance and oversight for the quality control system of
the audit firm. The third is the registration review of audit firms
which audit listed companies in which decisions are made basedon a confirmation of the suitability of the audit firm. Since April
2023, we have been monitoring the implementation of theseprocesses through the system shown to the right.

1.

Audit Practice Review and Investigatory Committee
This process investigates and reviews the status of implementation ofindividual audits and the validity of the audit opinion, as well as items
related to professional ethics, and where necessary, makes
recommendations and gives instructions, and proposes disciplinary
actions to the Chairman and President. The Audit Practice Review andInvestigatory Committee is composed of up to 17 members, two of which
are external experts.

https://jicpa.or.jp/about/activity/self-regulatory/inspection/1

 reation and Operation of a Registration
C
System for Auditors that Engage in Audits of
Listed Companies and Similar Companies

To provide higher discipline for audit firms responsible for
auditing listed companies, JICPA’s registration system
which was operated as a self-regulatory framework has
been changed to a statutory framework. JICPA has
instituted rules and systems in accordance with thesechanges.

2

 trengthening the Foundation ofS
Small and Medium-sized Audit Firms

There are more cases of small and medium-sized audit
firms taking on the auditing of listed companies and IPO ofcompanies. JICPA expressed an interest in supporting small
and medium-sized audit firms in the discussion over thelegal amendments and is continuously implementing
policies to create an environment to offer that support.

3

 hanges to the Registration SystemC
for CPAsThe number of CPAs working at companies andgovernment institutions as well as the number of CPAs
being appointed as outside directors is increasing. Against
this backdrop, registering “place of work” became arequired item to report to the system. In addition, newregulations regarding the deregistration of CPAs were
established. JICPA has instituted rules and systems inaccordance with these changes.

4Including Accounting Education
Activities in the JICPA Constitution

In the current set of amendments, “rules related toaccounting-related education and other activities to spreadand create knowledge of accounting” was newly added to
the JICPA Constitution. JICPA has instituted rules andsystems in accordance with these changes.

2.

Self-Regulatory Monitoring Conference
Monitoring
Review Board forAppropriate Procedures
Where a request
for a review is filed

Review Board for
Registration on
Auditors that
Engage in Audits of
Listed Companies
and Similar
Companies

Quality
ControlCommittee

Disciplinary Committee
Audit Practice Review
and Investigatory
Committee

Disciplinary Committee
For items for which the Disciplinary Committee receives a request forreview from the Chairman and President based on a disciplinary proposal
from the Audit Practice Review and Investigatory Committee, theDisciplinary Committee will perform a review and decide the need fordisciplinary sanctions and their details. The Disciplinary Committee iscomposed of seven members, two of which are external experts.
Disciplinary System (In Japanese)

https://jicpa.or.jp/about/activity/self-regulatory/
officialdiscipline/

Quality Control of Audit Firms

Registration of Audit Firms which Audit
Listed Companies and Similar Companies

To provide guidance and oversight to audit firms which audit listedcompanies, in 2007, JICPA established a self-regulatory registration
system. With the current legal amendments, this registration system wasnewly positioned as a system within the Certified Public Accountants Act(Registration System for Auditors that Engage in Audits of Listed
Companies and Similar Companies). JICPA operates this system and has
established a “Review Board for Registration on Auditors that Engage in
Audits of Listed Companies and Similar Companies” as a dedicated bodyto review registrations and decide on the cancellation of registrations
from the list of auditors that audit listed and similar companies. To verify
whether there are reasons to deny registration in the registration
application for the list of auditors that engage in audits of listedcompanies and similar companies, a “suitability verification” is performed
through a quality control review.
Quality control review system (In Japanese)

The Amended Certified Public Accountants Act (In Japanese)

Registration ofaudit firms which audit
listed companies andsimilar companies

Qualitycontrol ofaudit firms

Individual casereview

Quality control review system

To ensure social trust in audits, in 1999, JICPA introduced the quality
control review system and began implementing quality control reviews ofaudit firms (both audit firms and CPAs). The quality control review
involves accessing the design and operation status of the quality control
systems of audit firms, notifying the audit firms of those results, issuingrecommendations for improvement as needed, imposing appropriate
measures, deciding on appropriate measures, and receiving reports on
the status of improvement.

3.

Strengthening theauditing foundation

Individual Case Review

Investigation System (In Japanese)

Main Changes in the Amended Certified Public Accountants Act and JICPA’s Responses

Improving audit quality
OUTCOME

https://jicpa.or.jp/about/activity/self-regulatory/quality/

Review Team

Quality Control Committee

Self-Regulatory Monitoring Conference
Monitors the operational status of eachsystem and provides opinions and advice

Review Board for Registration on Auditors that Engage
in Audits of Listed Companies and Similar Companies
Registration
review

Audit firm
(registration Registration
applicant)Registration
cancellation review

List of auditorsthat engage inaudits of listedcompanies andsimilarcompanies

Deletion

Registration
cancellation

Suitability verification: performed through a quality control review

Summary of the Registration System for Auditors that
Engage in Audits of Listed Companies and Similar Companies

https://jicpa.or.jp/specialized_field/cpa-act/

30

JICPA

INTEGRATED REPORT 2023

JICPA

INTEGRATED REPORT 2023

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Chapter 3“Four Pillars” Initiatives to Fulﬁll Our Role in Society

Creating Trust in Society Together with the People of the World

Improving the Quality of Audits
by Audit Firms

Improving audit quality
OUTCOME

Strengthening theauditing foundation

standards based on conditions surrounding auditing while
maintaining compatibility with international standards
related to quality control.
JICPA began drafting guidelines for these operations in a
dedicated drafting committee, and in fiscal 2022, wepublished the amended version of Statement on Quality
Management Standards No.1 “Quality Management for
Audit Firms.”

Quality control of audits performed by audit firms requires
the proactive involvement of the chief executive in building aquality control system and of an audit implementation
system that matches the audit risks. Responding to a wide
range of situations and business operations is becoming an
issue for audit firms. Because of this, overseas we areseeing the introduction of quality control systems based on arisk-based approach handled mainly by audit firms. Against
this backdrop, Japan has also revised its quality control

CLOSE UP

Enhancing Frontline Auditing Capabilities

To provide recommendations to enhance frontline
auditing capabilities through fact-finding surveys ofcompanies and auditors, JICPA has contracted research
led by the Graduate School of Social Design. A reportcompiling this research was completed and released inJune 2022.
The report analyzed qualitatively and qualitatively the
gap in the awareness surrounding auditing work between
CPAs and corporate personnel. We believe that thefindings aided in developing mutual understanding
between CPAs and corporate personnel, and inrecognizing the capabilities and actions expected of
CPAs by both the capital markets and companies being
audited.
Enhancing frontline auditing capabilities (In Japanese)

https://jicpa.or.jp/specialized_field/20220630ffi.html

Adopting an International Quality Management Approach● Need for greater rigor in audit firm quality

Backgroundcontrol systems● Need for standards that work for all audit firms,

Recognition

regardless of their scale or other factors

Adopting the
Quality
Management
Approach● Monitoring of the application of ISQC 1, etc.
● Ongoing outreach activities● Inspection reports from regulatory authorities● Adopt the new Quality Management Approach to emphasize proactive quality management under the leadership of audit firms andto ensure flexibility in the application of standards.

● Demonstrate a commitment to quality through a culture that recognizes and emphasizes the role of audit firms in serving the public

interest by consistently performing high quality work.

● Develop and operate quality management systems adapted to the circumstances and work performed by individual audit firms.

Revision of previous standards in line with the adoption of the new quality
management approach
Newly established International Standards on Quality
Management (ISQMs) and amended ISA

Creating the Strong EthicalStandards Required of CPAs
The mission of CPAs, as stipulated in Article 1 of theCertified Public Accountants Act, is to serve the public
interest by ensuring the reliability of financial information. As
such, strong ethical standards are a core part of the value of
CPAs. The JICPA’s Code of Ethics is a set of ethical rulesthat CPAs must observe in order to contribute to the public
interest while maintaining a strong awareness of their
mission and self-discipline. The Code of Ethics applies to all
CPAs, not only when engaged in audits, but also in
consulting, serving as an outside directors or Professional
Accountants in Business (PAIB), and all other work.
The International Ethics Standards Board for
Accountants (IESBA) has established an International Codeof Ethics for Professional Accountants. JICPA’s Code of
Ethics is based on this code.
JICPA also pays close attention to the IESBA’s Code of
Ethics deliberations and proactively contributes opinions.
Reports on the discussions at IESBA meetings are publishedin the Accounting & Audit Journal .
JICPA released its Amended Code of Ethics in July 2022.
This amendment overhauled the entire Code, including its
organization and structure. It also included content changes
with significant practical impact, such as changing the rules
32

JICPA

INTEGRATED REPORT 2023

Trends in amended quality control standards (In Japanese)

https://jicpa.or.jp/specialized_field/quality_management/

Improving audit quality
OUTCOME

Strengthening theauditing foundation

for compensation dependence and expanding prohibitions ofsimultaneous provision of non-assurance services, as well
as revising duty of confidentiality rules.
In parallel with the Amended Code of Ethics, we createdthe “Declaration of Ethics” as a statement of our dedication
to practicing professional ethics. In the Declaration of Ethics,
based on the amendments to the Code of Ethics, CPAs
pledge to comply with the Code of Ethics as a code of
conduct for self-discipline as specialized professionals, toact in accordance with the intent and spirit of its basic
principles, and to dedicate themselves to practicing
professional ethics. Articles of commentary and roundtableson these contents are provided on the JICPA website and in
the Accounting & Audit Journal .

Professional Ethics(In Japanese)

Declaration of Ethics(In Japanese)

https://jicpa.or.jp/about/activity/self-regulatory/
criterion/

https://jicpa.or.jp/
specialized_field/
20220729fdf.html

CLOSE UP

Responding to the Audit Firm Governance CodeIn accordance with the amended Certified Public
Accountants Act and related cabinet orders and cabinet
office ordinances established and promulgated in 2022,
audit firms which audit listed companies and similar
companies were mandated to create systems to carryout their operations in compliance with the Audit Firm
Governance Code. The Audit Firm Governance Code is aset of principles and directives that are to be referenced
as guidelines in organizational governance. In applying
the governance code, a “comply or explain” approach
was adopted (implement the principles or explain why if
not implementing).
Because the original Audit Firm Governance Codehad been created with major audit firms in mind, manysmall and medium-sized audit firms that had not
implemented the code are now required to do so.
In March 2023, the FSA released the “Revisions to
the Principles for Effective Management of Audit Firms

CLOSE UP(The Audit Firm Governance Code).” When the revised
version was released, JICPA compiled our opinion
demonstrating our agreement with the revisions andsubmitted it to the FSA. Based on the intent of theserevisions, audit firms that are newly subject to the Audit
Firm Governance Code are called on to review and revise
their organizational structure to ensure and continuously
improve the quality of audits to respond to the
expectations of society. In addition to supporting theinitiatives by individual audit firms, as a self-regulatory
body, JICPA will work to operate the Registration System
for Auditors that Engage in Audits of Listed Companies
and Similar Companies appropriately.

Registration System for Auditors that Engage in Audits of
Listed Companies and Similar Companies (In Japanese)

https://jicpa.or.jp/business/inspector/20191212uvy.html

DX Forum for Small and Medium-sized Audit Firms

JICPA has proactively supported the digitalization of small and medium-sized
audit firms by improving training for the those working hands-on with IT at small
and medium-sized audit firms such as IT partners, IT experts, and other IT
representatives, by hosting IT communities, by providing networking opportunities
for IT representatives, and by encouraging the sharing of information on businessapplications and auditing tools. Furthermore, the auditors and CPAs that will be
registered in the list of auditors that engage in audits of listed companies andsimilar companies will be required to disclose the status of their business
management and the status of the application of the Audit Firm GovernanceCode. In this process, they will also be required to explain the status of theirimplementation of an IT platform.
In February 2023, JICPA held a DX Forum for small and medium-sized audit
firms which featured talks, exhibitions, and networking events on the topic of DX.

JICPA

INTEGRATED REPORT 2023

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Chapter 3“Four Pillars” Initiatives to Fulﬁll Our Role in Society

Moving from Training to Skill Development
to Strengthening the Adaptability of CPAs
To maintain and improve their credentials as professional
experts and to respond to changes in the auditing
environment, CPAs are required to engage in Continuing
Professional Education (CPE). However, considering the
expected future fields of activity for CPAs in addition to theexisting training courses, for CPAs to develop their skills
continuously, independently, and proactively, and for JICPA
to provide support for this continuous skill development, in
fiscal 2023 the program was changed from the CPE system
to the Continuing Professional Development (CPD) system,
and work is being done to improve the system.
The CPE system began as a voluntary program in 1998
in which JICPA supported CPAs’ self-improvement. In 2002,
as part of JICPA’s self-regulation, the CPE system became
mandatory for CPAs, and in 2004, through Article 28 of theCertified Public Accountants Act, the acquisition of training
credits became a statutory requirement. JICPA sees the CPD
system that was recently changed to include the CPE system
as a medium- to long-term issue and is evaluating thespecific details to create a CPD system.

Supporting the Skill Development
Required of CPAs
Amid the rapidly changing business environment surrounding
CPAs, for them to continue being trusted by society, theymust develop skills to improve their credentials continuously
in response to these changes.
In terms of credentials and skill development, thus far
the professional accountancy education program andContinuing Professional Education have been considered
independently of each other, and there has been no
designated committee structure that continuously evaluatedintegrated, comprehensive skill development as credentials
for CPAs.
Given this reality, JICPA’s Task Force for Studying the
Qualities and Abilities Necessary in CPAs published the“Report on Qualities and Abilities Necessary in a CPA.” In
the report, the Task Force identified five areas of qualities
and abilities necessary in CPAs going forward: Rapid
adaptability and embrace of continued learning; expert
knowledge; values, ethics, and attitudes; skills; and general
education. Based on these five areas, JICPA established a
new special committee to evaluate the integrated,comprehensive development of credentials and skills
through an all-inclusive, sequential process including
pre-examination education, the CPA examination, practicalexperience, the professional accountancy education
program, final assessment, and Continuing Professional
Development.

Creating Trust in Society Together with the People of the World

Improving audit quality
OUTCOME

Strengthening theauditing foundation

CPD
CPE
System to fulfill
legal obligations
through training
courses(ongoing)

System for CPAs todevelop their skills
continuously,
independently, andproactively, and for JICPA
to provide support for thiscontinuous skill
development considering
the expected future fieldsof activity for CPAs

CPD System (In Japanese)

Developing more Personnel
who are Active Internationally
JICPA provides opinions on discussions focused on
accounting and auditing that take place at various
international organizations. For example, under theInternational Foundation for Ethics and Audit (IFEA), theInternational Auditing and Assurance Standards Board(IAASB) and the International Ethics Standards Board for
Accountants (IESBA) set standards. These boards support
the creation of high-quality international standards forinternational economic development, and Japanese
representatives participate on the boards and committees.
Furthermore, at these international organizations, we areworking to develop personnel that can successfully represent
Japan in the future, and as part of this development, we
support study abroad by CPAs. We also continuously share
the appeal of working globally by posting interview articles
and videos of CPAs active in international fields on our
website and by holding seminars.

INTEGRATED REPORT 2023

Posts Held by Japanese Citizens at
Major International Organizations (As of March 31, 2023)

8International Federation of Accountants (IFAC)
Public Interest Oversight Board (PIOB)

2International Foundation for Ethics and Audit (IFEA)

4

Global Accounting Alliance (GAA)7ASEAN Federation of Accountants (AFA)3

The Confederation of Asian andPacific Accountants (CAPA)2IFRS Foundation (IFRSF)

18

International Valuation Standards Council (IVSC)

3World Business Council for
Sustainable Development (WBCSD)

1Vision for the future. (In Japanese)

https://jicpa.or.jp/vision_future/

Improving audit quality
OUTCOME

Strengthening theauditing foundation

Universities, graduate schools,
graduate schools of accounting, etc.

Improving audit quality
OUTCOME

Building a diverse society is also a goal for the CPA industry,
and JICPA aims to realize a society in which each CPA can beequally successful in a broad range of fields. Toward thisgoal, to further encourage active roles for female CPAs,
JICPA has established KPI for the ratio of female members,
associate members, and those passing the CPA examinationand is evaluating and implementing various policies toachieve these targets. To communicate the appeal of working
as a CPA, JICPA has created videos and career maps andholds events for women who aim to become CPAs.

Prior to acquiring certification
CPA examination
Professional accountancy
education program
Final assessment

When certification is acquired(CPA registration)

Supporting the Success ofFemale CPAs

Skill
development
at audit firms

After acquiring certification
Continuing Professional
Development (CPD)

Trend in the Ratio of
Female Members andAssociate Members
20 (%)(Practicalexperience andtraining at theaudit firm)

10

15.4

15.5

16.0

16.3

20

0

23.6

24.6

21.8

22.5

2021

2022

2023

March March March March

KPI
1Ratio of female members andassociate members by fiscal 2048

2

Ratio of women passing the CPA
examination by fiscal 2030

30%
30%

Setting ratios for female officer candidates for
JICPA and its regional chapters leadership position basedon their individual results

ACTION

0
2020

A society in which each CPA can beequally successful in a broad range of fields

Total number of professional education sessions
held for female CPAs/ networking events held

10

5

GOAL

Total number of information session about
the CPA system for junior high schools, high schools,
and universities/ events held for female students

30 (%)

15

Improving the understanding
and appeal of auditing

Monitoring indicators

Trend in the Ratio of
Women Passing
the CPA Examination

2019

2020

2021

https://jicpa.or.jp/cpainfo/introduction/cpa_women/

JICPA

Improving the understanding
and appeal of auditing

https://jicpa.or.jp/cpainfo/introduction/organization/cpe/

Professional participation of women (In Japanese)

34

Improving audit quality
OUTCOME

2022

Policies to encourage younger women to
pursue careers as CPAs
Policies to avoid women who are currently registeredas CPAs from cancelling their registrations
Policies to allow women who are currently registeredas CPAs to be even more successfulJICPA

INTEGRATED REPORT 2023

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Chapter 3“Four Pillars” Initiatives to Fulﬁll Our Role in Society

Creating Trust in Society Together with the People of the World

Contributing toa Sustainable Society

Responding to
growing needs in the fieldof information disclosure

OUTCOMEThe importance of sustainability is rapidly increasing on a
global basis. There are demands for sustainability
information disclosure in both corporate management and ininvestment decisions, and CPAs are being called on toincrease their knowledge and capabilities surrounding
sustainability. As such, JICPA evaluated the state ofsustainability education for CPAs. In June 2022, theSustainability Education Study Project Team released its
report entitled “Discussion Paper—Integrating Sustainability
into Professional Accountants’ Competency.”
Thereafter, JICPA formed the Sustainability Education
Special Committee. The Special Committee evaluatedpolicies to steadily advance initiatives aimed at skill
development related to sustainability among CPAs, and in
April 2023, released its “Sustainability Capacity-Building
Policy and Actions.” JICPA will now transition to
implementing the basic policy and actions outlined in thereport, rapidly and effectively developing skills related tosustainability among CPAs, and promoting activities toensure the usefulness and reliability of sustainability
information.
In a statement released in September 2022 entitled“IOSCO encourages standard-setters’ work on assurance ofsustainability related corporate reporting,” the International
Organization of Securities Commissions (IOSCO) expressed
its support for the development of sustainability assurance
standards by the International Auditing and AssuranceStandards Board (IAASB) and the International Ethics
Standards Board for Accountants (IESBA). On the same day,the IAASB and IESBA issued a joint statement welcoming
IOSCO’s statement. JICPA strongly supports thedevelopment of sustainability assurance standards by the
IAASB and the IESBA. In addition to participating directly inthe development process for these standards, JICPA plans toprovide our opinions and to be actively involved based on our
track record of initiatives undertaken toward the applicationof these standards.
Furthermore, JICPA is implementing concrete policies
aimed at improving the usefulness and reliability of corporate
information disclosure. Additionally, to respond to trends
related to sustainability disclosure in Japan and overseas, inJuly 2021, we established the “Corporate Disclosure
Committee” as a permanent committee. JICPA has
established three subcommittees of the Corporate
Disclosure Committee to pursue evaluation: theSustainability Expert Committee, the Sustainable FinanceExpert Committee, and the Non-financial Disclosure Expert
Committee.
JICPA is also focused on providing information on trends
in sustainability disclosure, which has a large impact on thework of CPAs. As part of these efforts, in 2021 we began
regularly issuing the “Global Sustainability Insights” on our
website as articles explaining international developments
related to sustainability.

Executive Board

Corporate Disclosure
Committee
Scope of duties:
Corporate information
disclosure including
sustainability information
Sustainable finance

Coordination

Auditing andAssurance Standards
Committee

Coordination

Sustainability
Expert Committee

Sustainable FinanceExpert Committee

Researches trends onsustainability-related disclosure in
Japan and overseas and evaluates
and issues opinions in a timely
fashion as necessary

Evaluates methods to ensure thereliability of a broad range of
information related to sustainablefinance including assurance

Corporate Disclosure (In Japanese)

https://jicpa.or.jp/specialized_field/corporate_reporting/

The number of CPAs who belong to and are active atcompanies is increasing year by year, as are the situations
requiring the specialized knowledge, experience, anddecision-making abilities of CPAs, such at companies andgovernment offices. Moreover, the number of listedcompanies with CPAs appointed as outside officers now
makes up around half of all companies. We expect the
number of CPAs working at companies to continue toincrease, along with expectations being placed on CPAs. For
CPAs to fulfill our social responsibilities, JICPA is working toenhance our education and training to improve in turn theskills and credentials of CPAs.

Non-financial Disclosure
Expert Committee
Issuing opinions on thedevelopment of corporate
information disclosure
standards including nonfinancial information

Accounting
System Committee

Disclosure
Expert CommitteeJICPA

INTEGRATED REPORT 2023

Strengthening
corporate governance● Planning and running training sessions related to Professional Accountants

Main initiatives of
the Professional
Accountants in Business(PAIB) Council

Main initiatives of
the Council for
Accountants Serving as
Outside Directors andCorporate Auditors

in Business (PAIB)● Providing support for the operations and management of regional andindustry-specific networks● Providing information through websites and emails as well as PR activities

Professional Accountants in
Business (PAIB) Council (In Japanese)● Surveys and research related to accounting, auditing, ethics, governance,internal control, as well as various systems from the standpoint of supporting
operations related to Professional Accountants in Business (PAIB)

https://jicpa.or.jp/business/paib/● Training sessions implemented for accountants serving as outside directors

Council for AccountantsServing as Outside Directors andCorporate Auditors (In Japanese)● Preparation of the handbook for outside corporate auditors, etc.

● Providing information through emails, dialogue, and roundtables as well asother PR activities

https://jicpa.or.jp/specialized_field/
exclusive/● Holding events such as special seminars

In formulating Key Audit Matters (KAM), CPAs hold numerous
discussions on risk sectors with auditors. Providing the KAM in audit
reports deepens dialogue with investors and by extension leads tostronger corporate governance.
The fiscal year ended March 31, 2022 welcomed two years since
KAM were mandated in audits of listed companies. To prepare for thisrequirement, JICPA collected, analyzed, and summarized cases of
KAM in the audit report from April 2021 through the fiscal year ended
March 31, 2022. We performed an overall analysis of trends throughquantitative analysis (Number of KAM, number of words) and aqualitative analysis covering specific topics (Early adoption, revenue
recognition, Information Technology, fraud, going concern,climatechange, and percentage‑of‑completion method) as well as ofexamples of ingenuity in listing the KAM in audit reports. JICPA thenpublished these research findings as reference materials on thepractical operations involved with KAM.
As we welcome final audits of the fiscal year ended March 31,
2023, we are compiling points of consideration from the standpoints of
avoiding the use of boilerplates and improving the usefulness of KAM
for publication as a document to share knowledge with CPAs.
Key audit matters (KAM) (In Japanese)

https://jicpa.or.jp/specialized_field/kam/

36

OUTCOME

Furthermore, by promoting the organization of CPAs who
belong to and work at companies (Professional Accountantsin Business, PAIB) and CPAs appointed as outside directors
and creating opportunities to exchange information, we are
expanding the roles in which CPAs are active andencouraging the mobility of human resources. Additionally, in
December 2022, we revised our “Handbook for CPAs Who
Are Outside Corporate Auditors.” The handbook is a tool forwhen CPAs are newly appointed as outside corporate
auditors to comprehensively grasp items of consideration as
well as for CPAs already appointed as outside corporate
auditors to refresh their understanding of necessary items.

Spreading Awareness of Key
Audit Matters (KAM)

JICPA’s System to Promote the Disclosure of Sustainability Information

Gathering informationand opinions on
corporate disclosure
from experts

Maintaining and Improving the Credentialsof CPAs Active at Companies

OUTCOME

CLOSE
UPStrengthening
corporate governance

JICPA Online Forum HeldIn March 2023, JICPA held an online forum
entitled “What does sustainability information
disclosure mean in this new era?—
Understanding policy discussions and aiming
for effective implementation.” At this event, we
invited the FSA to explain the revised cabinet
office ordinance on corporate information
disclosure and presented good examples ofsustainability disclosure. Furthermore, towardrealizing effective disclosure that leads tocontinuous value creation, we invited expert
investors and members of the corporate world
to discuss the points in the ordinance onrevised disclosure and advanced initiatives insustainability disclosure.
JICPA Online Forum (In Japanese)

https://jicpa.or.jp/news/
information/2023/20230414dea.html

JICPA

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37

Chapter 3“Four Pillars” Initiatives to Fulﬁll Our Role in Society

Supporting Companies’ Initial Public
Offerings (IPOs)
While coordinating with relevant parties including audit
firms, securities companies, venture capital firms, and stock
exchanges, JICPA continuously works to build anenvironment to stably provide high-quality auditing tocompanies aiming for IPOs.
1.	Understanding the Reality of firms providing
IPO Auditing
Once every quarter, JICPA conducts a questionnaire survey
on the status of firms providing IPO auditing to regularly
gauge the current reality.
2.	Preparing a List of Small and Medium-sized Audit
Firms who are Newly Responsible for IPO Auditing
As part of building an environment for companies aimingfor IPOs to be appropriately audited based on their scaleand growth stage, JICPA curates and manages a list of small
and medium-sized audit firms that are proactive toward
IPO auditing.

Issuing Opinions on Tax Reform toCreate a Better Society

Creating Trust in Society Together with the People of the WorldOUTCOME

Resolving social issues
in various sectors

3.	Curating the List of Sole Practitioners Offering IPO
Support and Networking
To aid in companies aiming for IPOs receiving theappropriate support based on their scale and growth stage,
JICPA curates and manages a List of Sole Practitioners
Offering IPO Support and networking.
Furthermore, JICPA also holds discussions with small
groups and other informal events as venues for networking
for CPAs who work as sole practitioners.
4. Holding IPO-related Training Sessions
JICPA holds training sessions related to the practicaloperations of IPO auditing and skill sources for CPAs related
to IPO support operations.

IPO support provided by CPAs (In Japanese)

https://jicpa.or.jp/business/ipokansa/

OUTCOME

Resolving social issues
in various sectors

Raising Awareness of the Need for
Accounting Literacy
JICPA has taken a serious approach to promoting accounting
education since 2016. “Accounting literacy” is somethingthat is important not only to people involved in accounting or
financing work or experts, but also as a necessary form ofliteracy for anyone throughout their lives.
In recent years, the use of accounting information as partof junior high and high school curricula has become a topic
of discussion. However, teachers do not have enoughmaterials for such curricula, and in the results of aquestionnaire given by JICPA to junior high school teachers,
more than 90% responded that they would be uncomfortablecovering accounting in their classrooms. Given this, with therecognition that expert support is required, JICPA has
focused on providing that support to teachers. As one ofthese initiatives in fiscal 2022, we invited experts involved inaccounting education and junior high and high school
teachers to speak at our “JICPA Accounting Education
Symposium.”
Furthermore, as accounting literacy contents, JICPA is
producing an anime series entitled “One-Word Shin.”Through easy-to-understand contents that use familiar
themes, JICPA aims to contribute to boosting accounting
literacy among each Japanese citizen.

OUTCOME

Resolving social issues
in various sectors

Teachers who areuncomfortable covering
accounting in their classrooms
Comfortable
8.5%

No answer
0.9%

What is necessary togain comfort
Acquiring materials to use
in class
Acquiring manuals to use
in class preparation
Lectures for teachers
Watching explanatory videos tolearn about accounting yourself

Uncomfortable
90.6%

Acquiring books to learn
about accounting yourself

Source: Excerpt from the “Results of a Survey on the Response to ‘Basic Accounting
Education’ in Junior High Schools”

Promoting accounting education (In Japanese)

Each year, JICPA identifies issues amid recent social trends,
compiles opinions on the nature of the tax system and the
direction of tax reforms, and makes recommendations. In
July 2022, JICPA released our Fiscal 2023 Tax Reform
Opinion Paper.
In the first section of the paper, “Recommendations
Regarding the Tax System,” we examined the nature of thetax system as a policy method to realize sustainableeconomic growth for the Japanese economy assuming social

conditions including global inflation.
The second section of the paper, “Fiscal 2023 Opinions
on Individual Tax System Reforms,” JICPA voiced key
opinions on reducing the administrative burden for small andmedium-sized companies ahead of the start of the invoicesystem in October 2023 and on tax deduction measures tocontribute to promoting DX investment to improve the levelof record keeping, proposing measures aimed at realizing
even greater hands-on skills.

Section 1 Recommendations Regarding the Tax System

1

Strengthening theCompetitiveness ofJapanese Companies

 Building a viable tax system for the digital economy
 Introducing a new tax system for educational funding to produce more entrepreneurs and building a
tax system to encourage the growth of startups

2

Responding to Changes
in Socioeconomic
Structures, Demographic
Graying and Other Issues

 Make it easy for anyone to file a final tax return in line with the diversification of work styles
 Reconsider existing tax systems to accommodate the diversification of work styles
 Improve tax agency efficiency using DX while protecting the rights of taxpayers
 Consider introducing household-level taxation as a way of addressing the low birth rate and promoting
women’s workforce participation

3

Correcting
Economic Disparities

 Fundamentally revise inheritance and gift tax systems to promote the transfer of assets from seniors
to younger generations and correct economic disparities
 Revise tax system to avoid exacerbating asset disparities between households

Fiscal 2023 Tax Reform Opinion Paper (In Japanese)

https://jicpa.or.jp/specialized_field/20220701fjj.html

38

JICPA

INTEGRATED REPORT 2023

https://jicpa.or.jp/about/activity/basic-education/
Class support package for the “using accounting information”(In Japanese)

https://jicpa.or.jp/about/activity/basic-education/tools.html

Maintaining and Improving Public Services
that form the Foundation of National LifeOUTCOME

Resolving social issues
in various sectors

So that the public services that form the foundation of
livelihood of the people in Japan are appropriately
maintained into the future, JICPA believes that governanceat the organizations providing these services is essential. We
have begun evaluating the nature of governance at theorganizations providing public services by inviting academic
experts.

2. The Importance of Governance

1. Organizations Providing Public Services

3. Direction of Evaluation

Public services include healthcare, nursing care, childcare,and education. Each form of care is essential to everyday
life. Public services are provided by diverse bodies, including
public organizations such as government organizations andincorporated administrative agencies, private-sector
non-profit organizations such as medical corporations, social
welfare corporations, and incorporated educational
institutions, as well as infrastructure companies.

Organizations providing public services often use publicfunds, and to maintain these services even in a society witha declining population, boosting productivity is essential. To
do so, we need to strengthen further the organizational
governance that leads to effective resource allocation andefficient management activities.
So that JICPA can make recommendations on the nature ofgovernance shared by organizations that provide public
services given the broad mix of regulations, we haveestablished a project team and are moving forward with ourevaluation while gathering the opinions of academic experts.

JICPA

INTEGRATED REPORT 2023

39

“Four Pillars” Initiatives to Fulﬁll Our Role in Society

JICPA’s Efforts Toward theRealization of a Prosperous Society
Creating Awareness about the SDGs
In July 2021, JICPA formulated our SDGs Declaration,
declaring that CPAs will proactively work to contribute to the
SDGs. To promote activities on a constant basis to achieve
the SDGs, JICPA established the SDGs Promotion
Committee. JICPA will pursue evaluations to build asustainable society in the future so that CPAs belonging todifferent regions can pursue activities in an integrated
manner.
SDGs (In Japanese)

JICPA called on its members and associate members
nationwide to contribute to a relief fund. We collected relief
funds totaling ¥14,911,500, which were donated to theJapanese Red Cross Society and the UN Refugee Agency.

Access to CPAs
For the sound development of the CPA system, developmentof related academic research is essential. To respect theindependence of academics and to contribute to academic
research, JICPA is recruiting academic research featuring
access to CPAs. We hope that through the cooperation of
CPAs and audit firms in the research, we can produce
internationally highly acclaimed academic research.

Ukraine Relief Fund

Access to CPAs (In Japanese)

To provide support for the
response to the humanitariancrisis in Ukraine and for relief
efforts in neighboring
countries and other countries
receiving Ukrainian refugees,from April to June of 2022,

https://jicpa.or.jp/news/information/2022/20220930ech.html

Contributing to
the Global Goal of Net ZeroIn October 2021, the Accounting Bodies Network (ABN),*1
a member of the Prince of Wales’s Accounting for
Sustainability Project (A4S),*2 issued a joint statement
pledging its commitment to net zero emissions entitled“Accounting Bodies Net Zero Commitment.” Based on thisstatement, in December 2022, JICPA formulated ourroadmap to achieve net zero. To address the global issueof climate change response, JICPA will proactively evaluate
policies and carry out initiatives so that CPAs andspecialist accounting groups can contribute to therealization of net zero.

40

JICPA

INTEGRATED REPORT 2023

Resolving social issues
in various sectors

OUTCOMEJICPA’s Roadmap to Net ZeroSUSTAIN
Fulfilling Our Mission in Any Era

CO2 emissions (Thousand of tons of CO2 emissions)

0.4
0.3
0.2

JICPA’s connection with society

0.1

JICPA’s vision is to support the CPAs incontributing to sound economic development
and responding to society’s expectations
through transparent and neutral operations.
To be recognized externally as a properly
managed organization, we incorporate theviews of experts in our operations. Moreover,
we have 16 regional chapters throughout
Japan to ensure locally rooted operations. We
look forward to your further support as JICPA
continues to respond to the changing times
and connects with society.

0.0
2021

2025

 eductions through energyR
conservation
Scope 1 and 2 (Location basis)*1 A
 network established through cooperation between A4S andprofessional bodies across the globe, the ABN represents over 2.5
million professional accountants and students across 179 countries,
covering two-thirds of the world’s accountants.
*2 A4S (The Prince of Wales’s Accounting for Sustainability Project)Established in 2004 with the support of the UK’s King Charles III (during
his time as Prince), the A4S project works to help incorporate
sustainability into corporate financial reporting and decision making.

Chapter

https://sustainability.jicpa.or.jp/

Resolving social issues
in various sectors

OUTCOME

2030

2035

2040

2045

2050

 eductions through the lowering ofRthe emission factor
SBTi near-term targets

The goal is to reduce Scope 1 and 2 emissions by 42% or more,
the science-based target (SBT), by 2030, and through the concrete
evaluation and implementation of policy in the future, to continuously
reduce GHG emissions including Scope 3.

Roadmap to achieve net zero (In Japanese)

https://jicpa.or.jp/news/information/2022/20221213dbi.html

JICPA

INTEGRATED REPORT 2023

41

Chapter 4

JICPA’s Operation

Fulfilling Our Mission in Any Era

Activities of Meeting Bodies Chaired by External Experts

Aiming for Operations that can Create Lasting Trust

Auditing and Assurance Standards
Committee Expert Advisory Council

To realize our vision, JICPA establishes plans and manages the progress of our policies at ourorganizations starting with the Council. In this section, we will provide an overview ofour management structure and introduce important details from an operational perspective including
officers, regional chapters, and administrative offices.

JICPA has established the Auditing and Assurance Standards
Committee to evaluate, formulate, and establish codes ofpractice for items related to quality control in auditing,assurance, specialized work, and at offices. The Auditing andAssurance Standards Committee Expert Advisory Council
compiles recommendations from the committee and requests
opinions from the creators and users of financial statements
and academic experts with the goal of formulating codes withsocial agreement.

Basic Approach to Governance
The JICPA’s governance comprises the General Assembly,
which serves as the topmost decision-making body; theExecutive Board and Council, which are responsible for the
execution and oversight of institute operations; a range ofadvisory committees; and the Board of Corporate Auditors

and Self-Regulatory Monitoring Conference, which provide
monitoring.
JICPA organs that particularly require transparency orexpertise other than that of CPAs include outside experts.

Organization (As of March 31, 2023)
Organizations that include outside experts

General Assembly
Board of Corporate Auditors

Self-Regulatory Monitoring Conference

Accounting auditor
Election Supervisory Committee
Nominating Committee
Compensation Committee

Council
Council Members
Executive Board
Chairman and President
Deputy Presidents

Disciplinary
Committee

Review Board
for Appropriate
Procedures

JICPA External Advisory Committee
Board of Senior Advisors

Summaries and meeting materials for the Auditing and AssuranceStandards Committee Expert Advisory Council (In Japanese)

https://jicpa.or.jp/about/activity/yuushikisya/auditing_standards.html

Ethics Standards Committee Expert
Advisory Council
To evaluate and establish codes related to the professional
ethics of committee members, JICPA has established an
Ethics Standards Committee. The Ethics Standards
Committee Expert Advisory Council compiles the codes
related to professional ethics from the Ethics Standards
Committee and requests opinions from the creators andusers of financial statements and academic experts with thegoal of formulating codes with social agreement.

P.45

Summaries and meeting materials for the Ethics Standards
Committee Expert Advisory Council (In Japanese)

P.45

Chief Executive

https://jicpa.or.jp/about/activity/yuushikisya/ethics.html

Executive Board Members

Various committees, etc.

Chapters (Regional Chapters)

To ensure objectivity and fairness in our self-regulatory
activities and trust from society in the CPA system, JICPA
has established a Self-Regulatory Monitoring Conference.
The Self-Regulatory Monitoring Conference’s goal is tomonitor the overall operations and status of JICPA’s
self-regulation and items for improvement and to provide
opinions and advice from the broad perspective of capital
markets and society.

Details of the duties and main activities of the committees (In Japanese)
https://jicpa.or.jp/about/activity/committee/

Decision-making Flow (Summary)

42

JICPA

Executive Board

Council

General Assembly

Deliberates matters to be
proposed to the Council andmatters related tothe execution of
institute operations

Deliberates matters to be
proposed to the General
Assembly and makes
regular reports on
institute operations

Holds resolutions on JICPA’s activity
plans, budgets and financial results,
and changes to the JICPA Constitution
and other rules/reports on instituteoperations

INTEGRATED REPORT 2023

Through suggestions on the formulation of standards
that utilize broad, external knowledge and differing
perspectives from those held internally, we are working
to contribute to the continued development of the CPA
industry in response to the dramatically changing
auditing environment.

Chair, Auditing andAssurance Standards Committee
Expert Advisory Council
Professor, Nihon University Collegeof Commerce

Masayuki Horie

The perspective of external experts

As an adjunct organization to the Ethics Standards
Committee, the Ethics Standards Committee Expert
Advisory Council works to enhance the transparency ofthe process to create codes including ethical rules froman international perspective and to formulate codeswith social agreement through the opinions ofstakeholders other than auditors.

Chair, Ethics Standards Committee
Expert Advisory Council
Professor Emeritus,
Aoyama Gakuin University
Professor, Ohara Graduate School of
Accounting

Shinji Hatta

P.46

Self-Regulatory Monitoring Conference

Administrative Offices

The perspective of external experts

Maintaining a High Level of
P.31
Social Trust in the Work of CPAs

Summaries and meeting materials for the Self-Regulatory
Monitoring Conference (In Japanese)

https://jicpa.or.jp/about/activity/self-regulatory/quality/
monitoring.html

The perspective of external experts

Amid the increasing social importance of the core valueof fairness, to further improve the quality control ofauditing as the duty of the accounting profession, weare building infrastructure with the goal of
consolidating assurances of the functions of capital
markets.

Chair, Self-Regulatory Monitoring
Conference
Professor, Graduate School of Political
Science, Waseda University
Former Commissioner,
Board of Audit

Mari Kobayashi

JICPA

INTEGRATED REPORT 2023

43

Chapter 4

JICPA’s Operation

Fulfilling Our Mission in Any Era

Introduction of Officers

Introduction of Advisors

The JICPA’s officers comprise the chairman and president, deputy presidents, chief executive, executive board members,
council members, and corporate auditors. The total number of officers is capped at 90. Officers are mainly CPAs elected by the
JICPA’s members. However, to ensure the transparency of JICPA operations, two council members and one corporate auditor
are non-CPA outside experts. In addition, the chief executive may be either a CPA or an outside expert.

The JICPA External Advisory Committee is made up of non-CPA outside experts and meets
three times a year to provide advice as needed regarding improvements to the work of CPAs.
External Advisory Committee Members (As of March 31, 2023)

*Positions and titles are current as of March 31, 2023.

Naoki Izumiya

Akira Kiyota

Apr. 1972
Mar. 2003
Mar. 2004
Mar. 2009

Apr. 1969 J oined Daiwa Securities Co. Ltd. (Currently
Daiwa Securities Group Inc.)
Apr. 1999 President, Daiwa Securities SB CapitalMarkets Co. Ltd. (Currently Daiwa Securities
Co. Ltd.)
Jun. 2008 Chairman of the Board and Corporate
Executive Officer, Daiwa Securities Group Inc.
Jun. 2011 Honorary Chairman, Daiwa Securities GroupInc.
Jun. 2013 Director, Japan Exchange Group, Inc.
President & CEO, Tokyo Stock Exchange, Inc.
Jun. 2015 Representative Executive Officer, Group CEO,Japan Exchange Group, Inc.
Director, Tokyo Stock Exchange, Inc.

Chairman, Japan Investor Relations/
Honorary Advisor, Asahi Group Holdings, Ltd.

Mar. 2010
Jul. 2011
Mar. 2014
Mar. 2016
Mar. 2018
Jun. 2018
Mar. 2019
Mar. 2021

Director & Representative Executive Officer,
Group CEO, Japan Exchange Group, Inc.

Joined Asahi Breweries, Ltd.
Director, Asahi Breweries, Ltd.
Managing Director, Asahi Breweries, Ltd.
Senior Managing Director and Senior Managing
Corporate Officer, Asahi Breweries, Ltd.
President and Representative Director,
Asahi Breweries, Ltd.
President and Representative Director,
COO, Asahi Group Holdings, Ltd.
President and Representative Director,
CEO, Asahi Group Holdings, Ltd.
Chairman and Representative Director,
CEO, Asahi Group Holdings, Ltd.
Chairman and Representative Director,
Asahi Group Holdings, Ltd.
Chairman, Japan Investor Relations Association
Chairman of the Board,
Asahi Group Holdings, Ltd.
Honorary Advisor, Asahi Group Holdings, Ltd.

Noriaki Shimazaki

Mariko Bando

Outside Director, Nomura Holdings, Inc./
Former Trustee, IFRS Foundation

Mitsuo Tsuruta

Kanako Ogura

Hisashi Sato

Tetsuya Mogi
Shigeki Yagi

Takako Fujimoto

Shintaro Goto

Apr. 1969 Joined Sumitomo Corporation
Jan. 2003 Member, Business Accounting Council,
Financial Services Agency
Jan. 2009 Trustee, IASCF Foundation (Currently the
IFRS Foundation)
Jul. 2009 Special Advisor, Sumitomo Corporation
Jun. 2011 Director, Financial Accounting Standards
Foundation Public Governor
Japan Securities Dealers Association
Chairman, Self-regulation Board
Japan Securities Dealers Association
Sep. 2013 Senior Advisor, IFRS Foundation AsiaOceania OfficeJun. 2016 Outside Director, Nomura Holdings, Inc.

Naruhito Minami

Shuichiro Akiyama

JICPA Officers (As of March 31, 2023)
ChairmanandPresident

Naruhito Minami

Chief
Executive

Hisashi Sato

Executive
Board
Members(32)

Tatsuya Arai
Hiroki Kitagata
Toshio Sato
Toshiyuki Nishida
Hidehiko Yuki

CouncilMembers(44)

Corporate
Auditors (4)Kanako Ogura

Mitsuo Tsuruta

Takako Fujimoto

Shuichiro Akiyama

Shigeki Yagi

Shintaro Goto

Masato Inagaki
Kazuya Kitazumi
Toshihiko Shibusa
Mitsujiro Fuseya
Yoshio Yukawa

Yasushi Inagaki
Emi Kusakabe
Keiko Sugaya
Daijiro Furutani
Tomoaki Yoshimura

Noriko Umeki
Koji Ojima
Seigo Kou
Naoaki Kobayashi
Makie Suzuki
Yuko Suzuki
Shigehiko Matsumoto Satsuki Miyahara
Ichiro Waki

Eriko Otokozawa
Ryoichi Komatsu
Minoru Tobari
Koji Yasui

Yasushi Kaneko
Akira Koyama
Masumi Nakagawa
Yoko Yamada

Ikuko Akamatsu
Hiroshi Asano
Iwao Arai
Tsuguo Ito
Kazuki Iwashita
Yoshiaki Uesaka
Minoru Ota
Nobuaki Kanazawa
Akihiro Kawaguchi
Yoichi Kubo
Kazuhiro Kouzuma
Akihiro Kobayashi
Hirofumi Saka
Yoshiharu Sagami
Hiroshi Shiina
Takeshi Shibamoto
Toshiyuki Shimizu
Kazuaki Sekine
Katsunori Takahashi Raita Takahashi
Masafumi Takami
Kaoru Tanima
Hiroshi Tamamoto
Rie Tsuge
Kenichi Tsutsumi
Takuto Doi
Masahiro Togashi
Hanae Nakaya
Tsuyoshi Nunome
Kyoko Hikita
Hitomi Masuda
Tatsuyuki Matsumoto Ruriko Mitsuhashi
Yoshizo Miyamoto
Junji Murakami
Toru Yasuhara
Akiyoshi Oba* (Chairman, Japan Investment Advisors Association)
Kazuyuki Masu* (Former Executive Vice President, Corporate Functional Officer, and CFO of Mitsubishi Corporation)

Yoshiaki Oshima
Nobuyuki Kobayashi
Kiyohiko Takashima
Fumio Tsuchiya
Naofumi Higuchi
Kazuhiro Yano

Masazumi Nishikawa Tadashi Hisamatsu
Yoshiyuki Minegishi
Hisashi Yamaura* (Professor Emeritus, Meiji University/Former Commissioner, Board of Audit)
Names marked with * are outside experts.

44

JICPA

INTEGRATED REPORT 2023

Apr. 1969 Joined the Prime Minister’s Office
Jul. 1989 Director of Consumer Statistics Division,
Statistics Bureau, Management andCoordination Agency
Apr. 1995 Vice-Governor of Saitama Prefecture
Jun. 1998 Consul General of Japan in Brisbane,
Australia
Jan. 2001 Director General of Gender Equality Bureau,
Cabinet Office
Oct. 2003 Director, Showa Women’s University
Apr. 2007 President, Showa Women’s University
Apr. 2014 Chancellor, Showa Women’s University
Jul. 2016 Chairperson of the Board, Showa Women’s
University

Kazuhiko Fushiya

Yuko Miyazaki

Apr. 1967 Joined the Ministry of FinanceJul. 1999 Commissioner, National Tax Agency
Jul. 2001 Deputy Governor, National Life FinanceCorporation
Jul. 2002 Assistant Chief Cabinet Secretary
Jan. 2006 Commissioner, Board of Audit of Japan
Feb. 2008 President, Board of Audit of Japan
Jan. 2009 Retired from the Board of Audit of Japan
Jun. 2009 Chairman, Institute of Internal Auditors– JapanApr. 1979 R egistered as an attorney, Nagashima & Ohno
(Currently Nagashima Ohno & Tsunematsu)
Aug. 1984 The World Bank Legal Vice Presidency
CounselApr. 2004 University of Tokyo Faculty of Law Visiting
Professor
Jan. 2018 Justice of the Supreme Court of Japan
Jul. 2021 Legally mandated retirement
Sep. 2021 Advisor to Nagashima Ohno & TsunematsuJan. 2022 International Judge of the Singapore
International Commercial Court
International Judge

Chairman, The Institute of Internal Auditors – Japan/
Former President, Board of Audit of Japan/
Former Commissioner, National Tax Agency

Tetsuya Mogi

DeputyPresidents(7)

Chancellor, Showa Women’s University/
Former Director General, Gender Equality Bureau
Cabinet Office

Attorney/Nagashima Ohno & Tsunematsu Advisor/
Former Justice of the Supreme Court of Japan

Introduction of Senior Advisors
The JICPA’s former chairmen and deputy presidents serve as senior advisors. The Board of Senior Advisors meets
three times a year and provides advice as needed regarding improvements to the work of CPAs.
Senior Advisors (As of March 31, 2023)
Former chairmen (7)Akio Okuyama

Tsuguoki Fujinuma

Koichi Masuda

Shozo Yamazaki

Kimitaka Mori

Former deputy presidents (5)Giichi Yanagisawa

Kazutoshi Kogure

Tatsuya Kato

Kiyonobu Takeuchi

Hisae Kitayama

Aiko Sekine

JICPA

Masahiko Tezuka

INTEGRATED REPORT 2023

45

Chapter 4

JICPA’s Operation

Fulfilling Our Mission in Any Era

Introduction of the Chairmen of Regional Chapters

Introduction of Administrative Offices

Although JICPA is a single organization, it maintains 16 regional chapters covering all of Japan to guide, connect, and supervise
CPAs across the country and help ensure that they provide consistent, high-quality services.

The JICPA’s administrative offices comprise 34 groups within six divisions and the offices of the 16 regional chapters. Theseadministrative offices support the Group’s operations.
As of March 31, 2023, the divisions have a staff of 234 (164 men and 70 women), and the regional chapters a total staff of
105 (55 men and 50 women). Of these, a total of 72 (59 men and 13 women) are qualified as CPAs.

Chairmen and CPA Members of the Regional Chapters (As of March 31, 2023)

Administrative Organization (As of March 31, 2023)

Regional Chapters

Director General

Chief Executive

Divisions

16

Professional Regulation

regions
nationwide

Hokkaido Chapter

Hokuriku Chapter

398 (51)

Tohoku Chapter

Keiji Chapter
Okinawa Chapter

Hokkaido Chapter

Masahiro Togashi

Hyogo Chapter

Saitama Chapter

Chugoku Chapter

Tokyo Chapter

Northern
Kyushu Chapter

Names ofRegional Chapters
Names of Chairmen ofRegional Chapters

Number of CPAs (Numbers inparentheses indicate thenumber of female CPAs).

Professional Standards and Practices
Tohoku Chapter

Kenichi Tsutsumi
437(48)Chiba Chapter
Kanagawa Chapter
Tokai Chapter
Shikoku
Chapter

Kinki Chapter

Southern Kyushu Chapter

Tokyo Chapter

Saitama Chapter

Shigeki Yagi

Fumio Tsuchiya

20,182(3,176)

Northern
Kyushu Chapter

Yoshizo Miyamoto

876(91)

Chugoku Chapter

Hyogo Chapter

Keiji Chapter

Hokuriku Chapter

Chiba Chapter

Yoshiharu Sagami

Hirofumi Sakai

Yoko Yamada

Hitomi Masuda

Akihiro Kawaguchi

505(52)869(127)882(130)726(110)305(31)

Quality Control: Quality control reviews and related administrative
work as well as reporting the results of quality control reviews togovernment agenciesa
Audit Practice and Review: Individual reviews of the validity ofmembers’ auditing and audit opinions as well as administrative work
related to necessary measures
Discipline: Disciplinary action and other matters related to thestanding of members and associate members
Risk Management: Receiving documents related to statutory audits
from members, storing said documents, reminding members to
submit them, and necessary information collection to this end

859(110)

Ethics: Research, planning, and materials collection and preparation
related to norms and case studies regarding members’ professional
ethics, laws related to the work of CPAs, and the CPA system(Including the CPA systems of other countries)
Auditing: Research, planning, and materials collection andpreparation related to the theory and practice of auditing (Including
non-audit assurance services, etc.), quality control of members’
practices and individual audits, and information technology formembers’ work
Corporate Accounting: Research, planning, and materials collection
and preparation related to the theory and practice of accounting ofcompanies subject to audit under the Financial Instruments andExchange Act or Companies Act and other for-profit corporations
Corporate Disclosure: Administrative work related to research,planning, and materials collection and preparation regarding thedisclosure of corporate information (Including sustainability andother non-financial information and corporate governanceinformation)
Non-Profit and Public Sector: Research, planning, and materials
collection and preparation related to the theory and practice ofaccounting and auditing of incorporated schools, public interest
corporations, and other non-profit corporations as well as public
sector accounting
Small and Medium-sized Practices: Research, planning, andmaterials collection and preparation related to measures for small
and medium-sized firms
Tax and Management: Research, planning, and materials collection
and preparation related to tax laws and tax systems
Research and Consultation: Consultation desk for inquiries frommembers regarding auditing and professional ethics

CSR

Okinawa Chapter

Nobuaki Kanazawa
95(11)46

JICPA

Southern
Kyushu Chapter

Shikoku Chapter

Kinki Chapter

Tokai Chapter

Kanagawa Chapter

Raita Takahashi

Yoichi Kubo
249(24)

Shintaro Goto

Yasushi Inagaki

Minoru Tobari

INTEGRATED REPORT 2023

230(24)

3,838(639)2,244(341)

1,741(219)

PR and Brand Management: Administrative work related to brandmanagement for members and JICPA and administrative work
related to the issuance of information by JICPA
Accounting Education: Administrative work related toaccounting-related education and other activities to spreadknowledge and create awarenessInternational Contribution: Administrative work related tocontributions to international society

Human Resource Development: Administrative work related tointegrated skills development
Networking: Administrative work related to the Professional
Accountants in Business (PAIB) Council, the Women in Accounting
Professional Promotion Council, and the Council for AccountantsServing as Outside Directors and Corporate Auditors

Administration and Operations Strategy
General and Legal Affairs: Operations of the General Assembly,
Council, Executive Board, committees and other bodies, theestablishment, amendment and abolition of elements of the JICPA
Constitution and other rules, and the handling of contracts,
registrations, lawsuits, and other legal procedures
Facility Management: Administrative work related to the
management and operation of the JICPA Building, congratulatory,
condolence, and other benefits for members and associate
members
Member Registration: Registration of CPAs, junior accountants,
CPAs of other countries, and specified partners of audit corporations
Member Management: Administrative work related to invoicing formembership fees
Continuing Professional Development: Operation of theContinuing Professional Education (CPE) system
Final Assessment: Administration related to final assessments
Publications: Planning, editing, and publishing related to JICPA
newsletters, journals, and other publications

Business Management
Accounting: Administrative work related to financial results
operations, tax operations, fund management, and receipts anddisbursements
Human Resources: Administration related to personnel affairs
Management Control: Administrative work related to the building
and monitoring of frameworks to strengthen administrative
capabilities
Internal Control: Administrative work related to the building andoperation of internal control
Business Infrastructure and Systems: Administrative work related
to the building and management of business infrastructure,
information systems, and information security policy

Chairman and President’s OfficePlanning and External Affairs: Planning and coordination related
to the overall CPA system
Press Relations: Planning and coordination of PR activities related
to institute activities and operations (Limited to responding to media
organizations)
JICPA Research Lab: Surveys and research related to the CPA
system and the work of CPAs
International Affairs: Planning and promotion of basic strategy
related to international activities
Regional Chapters Affairs: Administrative work related to liaisonand coordination with the regional chapters (Including theoperations of the Regional Chapter Chair Committee)

JICPA

INTEGRATED REPORT 2023

47

Chapter 4

JICPA’s Financial Summary

Fulfilling Our Mission in Any Era

Key Financial Indicators (Years ended March 31)

Revenue Structure(Millions of yen)

2019

2020

2021

2022

2023

Ordinary revenues

6,643

6,837

7,260

7,445

7,656

Ordinary expenses

6,868

6,656

6,103

6,764

7,351

Net ordinary changes

(225)

181

1,157

680

305

Total changes of unrestricted net assets

175

855

1,160

688

273

Unrestricted net assets at end of year

11,557

12,412

13,573

14,262

14,535

Restricted net assets at end of year

879

849

853

850

839

Cash flows from operating activities

(112)

139

1,393

1,072

531

Cash flows from investing activities

(50)

90

(723)

(1,922)

1,663

Cash flows from financing activities

—

—

—

—

—

3,128

3,358

4,028

3,178

5,372

The JICPA’s main sources of revenue comprise the following three categories.
JICPA’s Revenue Structure

01

Standard fee/Chapter fee
Membership fees borne equally by CPAs who are members

Standard memberships are ¥6,000 per month, while associate memberships are¥1,500 per month. Chapter fees are distinct from standard membership fees.
Chapter fees support the specific operations of each regional chapter and are borneby the respective chapter’s members. These fees, ranging from ¥3,500 to ¥4,500
per month, depend on such factors as the size and number of members of theregional chapter.

02

Auditing membership fee
Membership fees borne by members who engage in auditingthat is the exclusive purview of CPAs

Members who form agreements pertaining to the services described in Article
2-1 of the Certified Public Accountants Act or the services specified in themembership fee rules (commonly referred to as audit agreements) are required to
pay the JICPA 1% of the audit fees they receive for the fiscal years pertaining tosuch agreements.

Cash and cash equivalents at end of year

Ordinary Revenues and Ordinary Expenses (Years ended March 31)

03

Business revenue
Revenues from the book sales of publishing operations, final CPA assessment fees,
educational seminar fees, etc.

8,000

7,000
6,643

In the year ended March 31, 2023 (fiscal 2023), the
JICPA collected standard membership fees of¥2,396 million, regional chapter fees of ¥1,475
million, and auditing membership fees of ¥3,295

million. The total of these fees, ¥7,168 million,
represented more than 90% of the JICPA’s ¥7,656
million in ordinary revenues for the year.

6,868

6,837

7,656

7,445

7,260

7,351

6,764

6,656
6,103

6,000

(Millions of yen)
Ordinary revenues

5,000

Ordinary expenses

2019

2020

2021

2022

2023

Financial Results for Fiscal 2023
In fiscal 2023, the JICPA recorded a positive netchange, amounting to ¥305 million, on its
statements of changes in net assets.*
Compared with fiscal 2022, ordinary revenues
and ordinary expenses both increased. The increase
in revenues reflected a rise in standard membershipand chapter fees due to an increase in the numberof members, as well as a rise in auditing
membership fees reflecting increased compensation
for statutory audits.
The increase in ordinary expenses was
attributable to the increase in travel within Japanand overseas with the relaxation of restrictions on

movement related to the spread of COVID-19, thereopening of events, and rising global inflation.
In addition, to provide support for CPAs working
in expanding and diversifying fields in response to
the changing business environment, including the
response to last year’s amendments to the Certified
Public Accountants Act, the JICPA increased its
administrative staff, promoted work reforms to
improve productivity, and upgraded systems andfacilities, resulting in an increase in costs.
*The financial results figures in this report are unconfirmed figures thathave not yet been approved by the General Assembly. The confirmed
figures will be provided on the website below.

Net Ordinary Changes and Breakdown of Ordinary Expenses (Years ended March 31)
7,500
6,000
4,500

1,200

1,157
2,366

2,465

2,565
2,357

680

3,000
1,500
0

4,502

181
4,191

2,845

600
305

3,746

4,198

4,505

(Millions of yen)
Administrative costs(Left scale)

300

Operating costs(Left scale)0

Net ordinary changes(Right scale)

-300

（225）
2019

900

2020

2021

2022

2023

Activity Reports and Plans/Budget and Financial Results/
Annual Reports and Integrated Reports (In Japanese)

https://jicpa.or.jp/about/activity/report/

48

JICPA

INTEGRATED REPORT 2023

JICPA

INTEGRATED REPORT 202349

4-4-1, Kudan-Minami, Chiyoda-ku, Tokyo
102-8264, Japan

https://jicpa.or.jp/english/

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©The Japanese Institute of Certified Public Accountants
No part of this report may be reproduced without permission.