Annual
Report2 02 2

Philosophy

Contents

The Mission of the CPA and the Role of the JICPA

Message from the
Chairman and President ............................................................................... 2

Japan’s Certified Public Accountants Act states that “The mission of certified public accountants, as auditing and accounting
professionals, shall be to ensure such matters as the fair business activities of companies and the protection of investors andcreditors by securing the reliability of financial documents and any other information concerning finance from an independent
standpoint, thereby contributing to the sound development of the national economy.” The Act defines the purpose of theJapanese Institute of Certified Public Accountants (JICPA) as upholding the professionalism of CPAs as well as guiding, connecting, and supervising its members.

Tagline“Building trust, empowering our future” was adopted as the JICPA’s tagline in April 2022.
Based on strong professional ethics and specialized expertise, CPAs strive to provide accountability in order to foster social
trust with people around the world. This stance, as well as our desire to continue to contribute to a secure and vibrant society by
doing so, is reflected in our tagline.

Message from theIncoming Chairman and President ............................................... 4
Special Feature 1
The Formulation of “Vision Paper 2022
—The Way Forward for JICPA” .......................................................... 6
Special Feature 2
New Branding for CPAs and the JICPA ................................ 7

Building Confidence in CPAs ............................................................ 38
1 JICPA Online Conference 2022
2 CPA System Initiatives
3 Initiatives in Auditing
4 Initiatives in Ethics
5 Initiatives in Corporate Disclosure

Meeting Society’s Needs ......................................................................... 45
1 Opinions on Tax Reform
2 Responding to IPO-Related Needs
3 Contributing to Regional Revitalization

Interview with Executive Board Member Tatsuya Arai

Special Dialogue .................................................................................................... 10

Securing and Developing Talent .................................................. 48
1 The Qualities and Abilities Necessary in a CPA

Kunio Ito, Director of Hitotsubashi CFO Education andResearch Center
Masahiko Tezuka, JICPA Chairman and PresidentInterview with Executive Board Member Mitsuo Tsuruta
and Executive Board Member Keiko Sugaya
2 Maintain and improve the credentials of CPAs working as

outside directors, outside corporate auditors, professional
accountants in business, and in other diverse areas
3 Develop professionals who can express professional

Who We Are
Activities ............................................................................................................................. 17
History .................................................................................................................................... 18
Overview of the CPA Profession .................................................. 20

opinions internationally and provide them opportunities
and support to do so
4 Increase the appeal of the CPA profession by supporting

the professional success of female CPAs

Public Relations ...................................................................................................... 54

1 Audits by CPAs

1 Press Conferences

2 Number of CPAs in Japan

2 Information Sessions on the CPA System

3 Areas of CPA Activity

Social Contribution Activities ............................................................ 55
1 Initiatives Aimed at Building a Sustainable Society
2 The JICPA’s Sustainability Initiatives
3 Basic Accounting Education

What We Do
Stakeholder Engagement ........................................................................ 25
Management Policy and Strategic Targets ................. 26
Professional Regulation Initiatives

JICPA Membership Badge
JICPA members are required to wear their membership badge at all times while working.
The badge’s design is a collection of simple squares enclosed in an ellipse. The repetition of squares,
which evoke stability, represents the community 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.

...........................................

28

1 Professional Regulation Overview
2 Individual Case Review
3 Quality Control at Audit Firms
4 Professional Regulation Monitoring

Continuing Professional Education System .............. 36
1 Overview
2 Implementation Status

How We Operate
Organization ................................................................................................................. 59
1 Governance
2 Regional Chapters
3 Administrative Offices

Financial Summary ............................................................................................ 66
1 Revenue Structure
2 Financial Results for Fiscal 2022 and the JICPA’s

Financial Administration

3 CPE Obligation Fulfillment
4 Annual Conference
Period covered
This report covers fiscal 2022, the period from April 1, 2021 to March 31, 2022. Certain parts also include information about matters prior and subsequent to these dates.

1

Message from the Chairman and President

Message from the Chairman and President

Working to Foster Confidence andProsperity throughout Society
Building Trust, Empowering Our Future

Masahiko Tezuka, Chairman and President of the JICPA

Enhancing the Adaptability of CPAs and the JICPAThe environment surrounding CPAs is changing dramatically.
The systems we use have undergone numerous changes in
the past several years, with the rapid internationalization of
accounting and auditing standards, as well as the expansion ofsustainability disclosure. There has been a steady stream ofviolations of the disclosure regulations for listed companies inand outside Japan, and audit regulations are being tightened
worldwide. At the same time, the number of JICPA members is
rapidly expanding and the scope of their work is diversifying:
the JICPA’s membership now stands at more than 33,000,
about 2.5 times the number in 2,000, and almost 60% of members are engaged in wide-ranging work outside of audit firms.
On top of all these changes, the global economy and society
have taken heavy blows from such unforeseen developments
as the COVID-19 pandemic and the Russian invasion of
Ukraine. The need for us to be rapidly adaptable to change, as
individual CPAs and the JICPA as a whole, is greater than ever.

Looking Back on the Past Three Years
When I took office as chairman and president, one of the firstissues I tackled was reforming the JICPA’s operations. We
defined the JICPA’s mission, vision, and values along with thefive strategic targets for officers and staff. We particularly
focused on building confidence in auditing. In this area, we had
to work very hard, in cooperation with market actors, to getthrough the difficulties imposed by the COVID-19 pandemic.
As a result, we were able to prevent disorder that could haveseverely damaged markets, helping to build stakeholder trust in
and understanding of auditing. Nevertheless, there is still a long
way to go in securing confidence in auditing, and the challenges I must hand off to my successor are numerous. With this inmind, we published Vision Paper 2022 as a review of our activities over the past three years and to clearly outline the issues
ahead that the next JICPA administration will need to take up.

The Most Memorable Initiatives of My Tenure

rable for me as unique experiences that JICPA members, andeven presidents, do not typically go through. I am also proudof the branding activities we undertook to clarify the CPA
identity amid the growth of diversity among CPAs. The resultof these efforts was that we defined trust as the core valuethat CPAs provide to society. Finally, I feel that Vision Paper
2022—the first update to the JICPA’s vision paper in 15
years—is a testament to, and the culmination of, the work I
did as chairman and president.

The JICPA’s Mission and Strengths in a Time ofUnprecedented Change
Looking at the distrust that permeates international relations, it
is painfully clear that in our turbulent times, when so few things
are certain, trust is what we need most. By exclusively handlingthe auditing of financial statements for more than 70 years,
CPAs have cultivated the ability to create trust. We must makeeffective use of this ability for the benefit of society. First, tobuild a sound economy and society underpinned by the reliability of information, we must resolutely fulfill our professional
responsibilities. We must also proactively respond to emerging
social needs, such as by providing assurance for sustainability
information. Furthermore, it will be important to fully leverage
the wide-ranging activities of CPAs today. I believe that if every
CPA conscientiously strives to provide accountability in theirwork—whether in accounting, auditing, or other roles—we canfoster trust across all parts of society and contribute greatly tothe realization of a more secure, vibrant, and prosperous world.

To Our Stakeholders
Going forward together as CPAs, we must continue working
to foster confidence and prosperity throughout society. The
JICPA will continue to assiduously work with stakeholders toresolve the issues laid out in Vision Paper 2022. I thank all our
stakeholders for their kindness and help over the three yearsof my presidency, and I look forward to your continued guidance and support.

Dealing with the COVID-19 pandemic and the amendment of
the Certified Public Accountants Act were particularly memo2

3

Message from the Incoming Chairman and President

Message from the Incoming Chairman and President

Contributing to Social Development by
Providing Value in the Form of Trust
Tetsuya Mogi, Incoming Chairman and President of the JICPA

Beginning in July 2022, I have the privilege of taking the helmof the JICPA’s operations on behalf of more than 40,000
members and associate members across Japan. As chairman and president, I will strive to ensure that the JICPA and
CPA industry meet society’s expectations regarding CPAs andtheir work and, by doing so, contribute to sustainable social
development by providing value in the form of trust.
The coming three years in which I will head institute operations will mark a very important period for determining thefuture direction of CPAs in Japan. We will respond with precision to society’s expectations related to ensuring confidence
in auditing, including those raised by the amendments to theCertified Public Accountants Act recently passed by the Diet,
as well as expectations of CPAs themselves as the range of
our activities expands beyond auditing.

Contributing to Society by Building Trust
The JICPA has adopted “Building trust, empowering our
future” as its new tagline.
In a similar vein, the recently published Vision Paper 2022—
which I led the preparation of under chairman and president
Masahiko Tezuka—identifies trust as the value that CPAs provide to society.
Building on the confidence placed in us, as CPAs we willcontinue to contribute significantly to sustainable social development by building trust throughout society.

Raising the Bar and Reinforcing theFundamentals in Auditing
A much wider range of firms can now handle the audits oflisted corporations. As such, we must reinforce the audit
infrastructure available to this wider range of auditors. To thisend, we will leverage digital technologies to enhance thesophistication of our operations and strengthen our operational infrastructure for handling internationalization. By applying digital solutions, we will eliminate time-consuming basic
tasks, allowing us to further shift the limited resources of
CPAs to areas that require sophisticated judgment.

4

Meeting the Broadening Expectations of CPAs
The fields in which CPAs work continue to broaden in
response to society’s needs for confidence. To meet the
expanding expectations of CPAs, we will strive to enhance
the abilities of CPAs working in diverse fields and strengthen
our networks.
Furthermore, we will proactively work to provide leadershipin the area of corporate disclosure, an area that has recently
come under great scrutiny.

Securing the People We NeedAs more people understand the appeal of the CPA profession, over the past several years, the number of people taking
the CPA examinations has grown. Ours is a leading industry interms of diversity—including gender diversity—and we willcontinue to advance diversity-related initiatives to further
enhance the appeal of the profession.
At the same time, many people are leaving the auditing
field. Some of these are moving on to pursue other interests,
but others are leaving for less positive reasons, like overwork
or feelings of stagnation. As we advance operational streamlining across the industry, we must work to reaffirm our role ofbuilding trust in society, the significance of our work, and thefulfillment that work can provide.

Proactive Coordination with Stakeholders
Coordination with stakeholders will be essential to solving theissues that lie ahead.
To this end, we will proactively engage with other relatedorganizations, building and strengthening relationships astrustworthy partners as we advance constructive discussion
and cooperation to address our shared challenges.
The entire CPA industry will work to meet society’s expectations for CPAs and to ensure that we are able to effectively
contribute to society.
I look forward to your guidance and support going forward.

5

Special Feature 1

Special Feature 2

The Formulation of “Vision Paper 2022
—The Way Forward for JICPA”

New Branding for CPAs and the JICPA

Amended several times since its establishment by the Certified Public Accountants Act in July 1948, Japan’s CPA system has
been in place for more than 70 years. In that time, CPAs have worked as experts offering expertise in accounting, auditing, disclosure, and corporate governance, while the JICPA has carried out initiatives in step with the expansion of CPA work, including
efforts to safeguard and enhance confidence in Japan’s capital markets and ensure the quality of accounting audits.
Upon taking office in July 2019, the JICPA administration of Chairman and President Tezuka worked to reform institute operations to foster even greater trust in CPAs from society under the slogan “Move Forward to the Future.” They endeavored tounderstand the current environment and issues facing the JICPA, looking a decade ahead to 2030 to chart a course forward.
Building on the Vision Paper published in 2007, the results of these efforts were published in March 2022 “Vision Paper 2022—
The Way Forward for JICPA.”
Vision Paper 2022 begins by laying out policy for institute operations and the JICPA’s mission (see page 26 for details about
the Tezuka administration’s management policy). It then presents the changes occurring in the environment around CPAs andhow the JICPA will respond, as outlined below.
By 2030, we want to enable the JICPA to look even further ahead, contributing to and leading the way toward the future. We also
aim to widely foster a positive image of CPAs as expert professionals who provide a kind of public utility or social infrastructure, building trust in society and helping to solve social issues. The JICPA will continue to advance institute operations toward these goals.

The JICPA undertook branding efforts to communicate to society the direction CPAs should aim for in the future as the profession diversifies. These efforts led us to update the JICPA’s tagline in use since 2013, “Engage in the Public Interest,” and create a
new institute logo. The new branding was officially unveiled in April 2022 at the JICPA Online Conference 2022 and will be rolled
out in full from July 6, 2022, which the JICPA designates as CPA Day.
The New CPA/JICPA Branding
TaglineBuilding trust, empowering our futureCore Concept*

As CPAs, we are expert professionals who contribute to the realization ofa more secure, vibrant, and prosperous world by providing the highest
standard of accountability based on robust ethics and specialized expertise and by working with people around the world to build trust in society.
* An expression of the basic ideas that underly the tagline and the role that CPAs seek to fulfill in society.

Changes in the Environment around CPAs
• Rising interest in sustainability (growing movement toward respect for diversity)• Socioeconomic globalization• Digitalization• Continued increase in the number of listed companies despite their stagnant growth• Expansion of social needs• Growing importance of developing and maintaining credentials and skills, as well as retaining talented people

Response to Changes in the Environment around CPAs

• Developing and maintaining 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

Publication of “Vision Paper 2022—The Way Forward for JICPA” (in Japanese)
https://jicpa.or.jp/specialized_field/20220309ibd.html

6Institute Logo

The Logo’s Design
The new logo is composed entirely of circular elements and vertical lines. The use of all lowercase letters eliminates
sharp angles and emphasizes round forms. The two round dots above the “j” and the “i” symbolize interpersonal connection, while the letters “cpa” are made of perfect circles, a shape defined by perfect mathematical beauty, communicatingstability and clarity. The lack of sharp angles imparts an overall gentleness, while the circles also suggest links, reflecting
ideals of connectedness and inclusion.

Reinforcing the functions of the JICPA

Initiatives Related to the Branding of CPAs
and the JICPA

In formulating the new branding, we reexamined our core aspirations for 2030 and summarized them as follows.
“In these unpredictable and uncertain times, the importance of trust in society is greater than ever.
As CPAs, we serve as professionals equipped with robust ethics, broad-ranging knowledge and specialized expertise in such areas as auditing, finance, accounting, tax
work, and consulting. For decades, by upholding accountability in society broadly while fulfilling our duty of accountability in our various roles, we have built trust in society.
Going forward, as CPAs, we will each strive to ensure the highest standard of accountability, working as professional partners with people around the world to build
trust across all parts of society and thereby contributing greatly to the realization of a more secure, vibrant, and prosperous world and a bright future.”

From “JICPA” to “jicpa”
The JICPA logo was changed to all lowercase letters in order to build upon the conventional image of prudence, diligence, authority, and tradition associated with
CPAs by evoking gentleness, warmth, and approachability, essential qualities for building closer relationships with people and communities.
The logo redesign reflects our strong determination to take on new goals and transform the JICPA.

• The value provided by CPAs
• Future vision
Expanding sphere of CPA activity
Reevaluating auditing work
• Approach to realizing the future vision

Initiatives Related to Enhancing and Securing
Professional Excellence among CPAs

The Ideas behind the New Branding

Initiatives Related to Institute Operations• Sustainability initiatives• The relationship between regional chapters andHeadquarters :Working together to strengthen institute activities• Responding to digitalization• Enhancing productivity and transparency in institute operations

The JICPA Symbol and Brand Color
The JICPA symbol has been in use since 1987. To maintain the symbol’s accumulated value and continuity with the meaning behind it while also building a new brand,
the shape of the symbol was left unchanged, but the JICPA’s purple brand color was replaced with a brighter, more saturated hue for a more vital and active look.
The Meaning of the JICPA Symbol• The use of a square balanced to be horizontally symmetrical expresses dependability.
• The rectangle rising from the center of the square, exactly twice as long as it is wide, represents the institute’s valuesof prudence and reason.
• The rectangle also evokes upward momentum, expressing the institute’s future-oriented commitment to the development of the free market economy.
• The crisp form of the square standing on its point captures an international sophistication.
• The symbol echoes the sumitate-kakumochi crest (a square at a 45 degree angle) used in Japan for centuries, conveying tradition rooted in the lives of the common people.

7

Special Feature 2

Special Feature 2

Interview with Executive Board Member Tatsuya Arai

Tatsuya Arai
Executive Board Member
JICPA

Q1

the social value and significance of the work CPAs do, including the core of our work in auditing, is not well known or
understood among the general public. At the same time, as
the range of CPA work grows more diverse, some of ourmembers and associate members seem to be having difficultyin establishing a clear professional identity for themselves.
Given these challenges, we felt that we needed to get aclearer idea of how our members and associate members—both those working in auditing and those mainly working outside auditing—see their identity as CPAs, the value CPAs
provide to society, and the way that value contributes to society. Then, once we had clarified these ideas for ourselves, we
needed to share them broadly with society. I believe thatdoing so is very important in terms of assisting JICPA members and associate members in establishing their own professional identity and bolstering their sense of purpose andpride. It was with all this in mind that we decided to undertakethe new branding initiatives.

The recent branding initiatives led to an update of the JICPA’s tagline and the creationof a new “Core Concept” to express the role that CPAs strive to fulfill in society. Could
you tell us more about the ideas that went into these?

We began our efforts to create the Core Concept by focusing
on what CPAs are now and what they ought to be, and aspire
to be, in the future. We gathered input not only from among
ourselves, but also a diverse range of CPA industry stakeholders. The project team then took the lead. Comprised of8

Building trust has always been a key part of what we seek
to do. In times of heightened uncertainty, society needs thistrust even more. The role of CPAs is to meet such needs bybacking up accountability in society while also fulfilling our
duty of accountability in our own work. It was this understanding that led us to include the phrase “providing the highest standard of accountability” in the Core Concept.
As a result of the above considerations and discussions,
we created the Core Concept to encapsulate the pride wetake as CPAs in the trust we have created in society by providing the highest standard of accountability across various
settings and positions, as well as our aspiration and determination to proactively work with various stakeholders to continue to contribute to the creation of a more secure, vibrant, andprosperous world and a bright future. The tagline "Building
trust, empowering our future" was created as a succinct
expression of the Core Concept.
In addition, we established six keywords for use when creating visuals that express the tagline or Core Concept:“open,” “dynamic,” “creative,” “lively,” “prosperous,” and“happy.” We are working to develop a visual vocabulary thatwill evoke these keywords for viewers.

What led to the decision to implement new branding?

The environment surrounding CPAs has changed immensely
since Japan’s “Big Bang” financial system reforms that began
in the latter half of the 1990s. In 2000, the JICPA had justover 13,000 members. Since then, our membership hasgrown by almost 20,000, to more than 33,000 in 2022. At thesame time, the scope of CPA activity continues to diversify;
today, more than half of our members do not belong to audit
firms. With this broadening, I feel that society’s perceptions of
the CPA profession have diversified, as well.
The recent branding efforts began with the recognition thatthe general public has relatively little awareness of the CPA
qualification and the work that CPAs do. Although most people are somewhat aware of CPA as a professional qualification,interviews with various CPA industry stakeholders found thatmany people didn’t have a concrete idea of what CPAs actually do, or of how auditing works. Furthermore, a nationwide
survey of non-CPAs aged 18 to 29 found that, compared withother professions, respondents did not have a distinct mental
image of what CPAs are. These findings seem to indicate that

Q2

conclusions: until now, CPAs have created trust by providing
the highest standard of accountability; and, going forward,
the provision of trust will continue to be the fundamental valuethat CPAs offer.
For example, until now, auditing has meant assuming theduty of accountability on behalf of corporations. Going forward, however, I think we will also need to fulfill our own dutyof accountability through our auditing in order to impart confidence. The Key Audit Matters (KAMs),* introduced from thefiscal year ended March 2021, illustrate this.
Looking at other areas of CPA activity, in tax-related work,for example, CPAs support the accountability of taxpayers.
And, at the same time, by working with a constant awarenessof proper accounting based on their ethical understanding—acore part of the CPA skillset—CPAs build trust by carrying out
their duty of accountability to a wide range of stakeholders,such as tax authorities, corporate executives, and financial
institutions. Similarly, when working as outside directors andcorporate auditors, or as professional accountants in business (PAIB) at corporations or in the public sector, CPAs build
trust by staying true to their underlying sense of ethics andexercising their specialized expertise to carry out their duty ofaccountability in whatever work they are doing.

CPAs active in a wide range of fields, the team discussed this
input to identify common threads in the value provided by
CPAs as the profession expands and diversifies, as well as
the value that CPAs should strive to provide to society going
forward. Through numerous discussions, we arrived at two

Q3

What challenges are next?

It will be important to spread awareness of the new branding
and the ideas behind it among CPAs and society at large.
This will require more than making sure our members know
the new tagline. Fostering awareness of the new brand willtake time. We will need to, for example, explain the tagline
and logo and increase their exposure at educational eventsfor JICPA members, display them on business cards andpublications, implement activities to increase awarenessthrough both Headquarters and regional chapters, and provide explanations to other stakeholders.

Furthermore, I believe that the most important factor for creating trust in society will be for each and every CPA to understand the ideas behind the tagline and core concept, and toembody them in their own activities based on high ethicalstandards and professional expertise. To this end, the JICPA
will continue to provide opportunities for study and implement
other measures to maintain and improve the ethical standards
and professional expertise of CPAs, while also promoting
branding activities with members to promote understanding of
the significance and value of CPAs in society.

* Key Audit Matters (KAMs)
Matters that auditors have deemed especially important in their audits of an organization’s financial statements in a specific year, selected from the various things that they discussed with the corporate auditors and other parties during the audit process, are described in the audit report as KAMs. Early adoption of KAMs began with audits for the year
ended March 2020, and their inclusion applies, in principle, to all audits of listed companies for fiscal years ended March 2021 and later.

9

Special Dialogue

Special Dialogue

The Ito Review and “Japanese-Style ShortTerm” Management Today

We invited Professor Kunio Ito, Director of Hitotsubashi CFO Education and Research Center to discuss the role of CPAs
and the JICPA in this time of rapid change with Masahiko Tezuka, Chairman and President of the JICPA. Professor Ito has
led the development of approaches to increase the corporate value of Japanese companies through his project with the
Ministry of Economy, Trade and Industry (METI),“Competitiveness and Incentives for Sustainable Growth—Building
Favorable Relationships between Companies and Investors,” and subsequent Ito Reviews.
(Dialogue held March 1, 2022)

Kunio Ito, Director of Hitotsubashi CFO Education and Research Center
Graduated from Hitotsubashi University Faculty of Commerce and Management in 1975. Served as Dean of the
Hitotsubashi University Graduate School of Commerce and Management and the Faculty of Commerce andManagement, and as the university’s Senior Vice President. Served as Specially Appointed Professor at the
Chuo Graduate School of Strategic Management. Served as project chairman on such METI projects as“Competitiveness and Incentives for Sustainable Growth: Building Favorable Relationships between Companies
and Investors” and “Report of the Study Group on Improvement of Sustainable Corporate Value and Human
Capital,” as well as the Cabinet Secretariat’s Study Group on Improving the Visibility of Non-Financial Information.

10

Tezuka Professor Ito, I understand you are currently working ona follow-up to the METI Report of the Study Group on
Improvement of Sustainable Corporate Value and Human
Capital (the “Human Capital Ito Review”)?
I t o Yes, we plan to publish the Human Capital Ito Review
2.0 this April or May.
Tezuka The first Ito Review1 was published in 2014, right?
I t o Right, August 2014. That was the very first.
Tezuka It was groundbreaking. In the review, you pointed outthat Japanese companies are innovative yet low-profit andraised concerns over “Japanese-style short-term” management. Almost eight years have passed since the review cameout; do you think that corporate management in Japan haschanged since then?
I t o The first Ito Review first made a big splash overseas,
which then prompted a greater response in Japan, I think. That
September, Bloomberg ran a shocking article. The article waspositive, but its title, “Profit Laggards Seen Catching Up as
Japan Seeks 8% Return,” was very symbolic of the issues we
faced. Everyone knew that Japanese companies had low capital productivity, with ROE of around 5%, but with that article,
Japan was branded a “laggard.”
Tezuka Yes, that’s how it was seen.
I t o I don’t think that people in Japan, especially corporate
executives, really understood the issue before that. They didn’t
think of themselves as profit laggards. Despite its enormous
size, the gap in profitability had gone largely unexamined. For
example, to explain the difference between the very high ROEof U.S. companies and low ROE of Japanese companies,
Japanese executives would say it was because U.S. companies were more leveraged, and that kind of management would
be destructive for Japanese companies. This was despite theactual data, which showed almost no difference in leverage
between the U.S. and Japan. It goes to show how dangerous
thinking based on preconceptions can be. To counter this,when working on the Ito Review, we put aside those preconceptions and fuzzy impression-based arguments and engaged
in a year-long evidence-based discussion. I think that being
confronted with how Japanese companies are seen from theoutside was a very important lesson.
Before the COVID-19 pandemic, the average ROE of Japanesecompanies had risen to 10%. There were concerns that focusing
on ROE and getting it over 8% would lead Japanese companies
to rely on share buybacks and or ways of increasing leverage.
Looking at the data from 2014 to just before the pandemic, however, while ROE steadily rose, there seems to have been a generaldecrease in leverage, as internal reserves increased.
To return to your question, investors’ short-termism is clearlyvisible in the data. The turnover rate of Japanese stocks has
increased, and today is high. The data on short-termism inmanagement, however, is not as clear.

Tezuka I ask that question because, based on my 33 years (asof June 2019) of experience in front-line work as a CPA, working mainly in Japan’s manufacturing industries, the Ito Review’s
diagnosis of “Japan-style short-term” management resonatedgreatly with me. I think there has been a rapid shift toward
short-termism since the 1980s. In the industries I encountered,as companies focused on annual profit, capital investment was
the first thing they let fall by the wayside.
I t o Yes, that’s borne out by the data, too.
Tezuka Then, they started to put off repairs and maintenance.
After that came research and development. Most investment
went to upgrading products already on the market, and before
long companies were only making things that could be brought
to market quickly. And then, finally, came people. Companies
stopped hiring new people or investing in education.
When I saw the words “Japan-style short-term management,” I had to agree.
I t o Rather than any one reason, this tremendous short-termism comes from the combination of a wide range of factors.
Even governance is involved; Japanese companies often switch
out their presidents after going through two medium-term management plans that are each three years long. I’m not sure wecan call this long-term thinking. It is difficult, for example, to execute structural reforms and see results in a three-year window.
Tezuka Just figuring out where the issues are takes a year anda half to two years.
I t o Even if they manage it in three years, there are only
three years left after that. With this kind of governance and top
management rotation, I think it really is difficult to successfully
implement long-term structural reforms.
Tezuka Yes, that approach may be fine when the everything isgoing smoothly and the company is growing, but not for implementing reforms.
I t o Exactly. That was why we determined, as you mentioned, that Japanese companies had the capacity for innovation but continuously low profitability. However, I think theircapacity for innovation may have atrophied since then. Skimping
on R&D, capital investment, and human resource development
is not a recipe for innovation. I think Japanese companies havelost a great deal of ground in terms of investment in human capital, which I suspect will be a more talked about issue going forward. Japanese companies have long had a reputation for being
people-friendly and treating their employees with care. It is truethat the Japanese “membership” model guarantees long-term
employment, but in return, employees are expected to be obedient to the company. This is not conducive to producing
independent-minded, autonomous talent.

Pushing for Change:
ESG Issues in the Ito Review 2.0 and the
Human Capital Ito Review
Tezuka The Ito Review 2.0 came out in October 2017.2 What
was its aim?

11Special Dialogue

I t o A tectonic shift has been taking place around theworld in the drivers of corporate value, from tangible to intangible assets. The change has not been as pronounced inJapan, but the market value of the S&P 500 in the UnitedStates is now almost all intangible assets. The first Ito Review
pointed out the problem of short-termism. Building on that, in
Ito Review 2.0, in order to realize the mission of sustained corporate value growth from a long-term perspective, we examined ESG factors and intangible assets and created the
Guidance for Collaborative Value Creation as a common language for corporations and investors.
Tezuka I think the Guidance for Collaborative Value Creation isan excellent model for consultants in terms of understanding
which parts of corporate management they should focus on.
I t o Reading the Guidance, one of the working group members from a foreign-based company let slip that it seemed togive away their “secret sauce.” In a sense, the Guidance madeoutstanding investor know-how free—a common good.
Tezuka It packages together everything from the furthest
upstream strategy to the most downstream aspects of stakeholder engagement and investor relations, and breaks it all
down into modules. I think there must be people out there using
the Guidance for Collaborative Value Creation in their consulting.
I t o And that’s fine. That’s what we were hoping for. We are
now working on revising the Guidance for Collaborative Value
Creation. The Study Group on Approaches to Making More
Substantial the Dialogues for Creation of Sustainable Corporate
Value, established in November 2019, released its interim reportin August 2020. In light of this, the SX Study Group3 is advancing a second round of discussions. It plans to release theresults of these, including a revised version of the Guidance forCollaborative Value Creation, as Ito Review 3.0.
As project chairman for both the SX Study Group, as it revises the Guidance, and for the Study Group on Improving the
Visibility of Non-Financial Information, sponsored by Prime
Minister Kishida, I am currently considering the best timing torelease the next review.
Tezuka The first Ito Review stresses the importance of ROE; Ito
Review 2.0 incorporates an ESG perspective and offers the
Guidance for Collaborative Value Creation. In the Human Capital
Ito Review, which followed, what did you most want to advocate?
I t o In the Human Capital Ito Review, I propose the 3P/5F
Model, comprising three perspectives and five common factorsthat describe the characteristics of the people strategies companies should pursue going forward. The first of the three perspectives is coordination between corporate strategy andpeople strategy. This may seem obvious, but looking at theactual conditions at corporations today, the truth is that there is
not much coordination.
Tezuka Why is that, when many companies have plenty of highly competent people?

12

Special Dialogue

I t o First is the issue of how Japanese companies see theirpeople. Although they say they value their people, they view
them as homogeneous, thinking in terms of headcount. Rather
than considering each employee’s individual character, skills, andexpertise, they manage by headcount, allocating this many people here and that many there. Headcount alone is not sufficient tomatch corporate strategy with human resource strategy.
Tezuka So, they ought to determine what kind of people theyneed?
I t o Yes. These companies have not sufficiently assessed
where their individual employees’ strengths lie. They do noteven have any solid basis on which to say whether or not theircorporate and people strategies are coordinated. Merely moving human resources around to level out unevenness—saying,well, this person has been in this department for a long time, so
next year they’ll move over there, and we’ll need someone totake their place—this is not people strategy.
Before we can ask whether a company’s corporate strategy
and people strategy are coordinated, we may have to ask
whether or not it even has a people strategy. Although companies pay lip service to the importance of people, they often feelthat getting too involved at the individual level can get messy
and avoid too much clarity, making it effectively off-limits. Thereis some very chilling data backing this up: a survey by U.S. polling company Gallup found that, of 139 countries assessed,
Japan ranked 132nd in employee engagement. What are we tomake of Japanese companies—which claim to have always
valued people—being among the very worst in terms of
employee engagement? Even allowing for Japanese respondents’ cultural hesitance to evaluate themselves positively insurveys, this rank is alarmingly low.
Tezuka Talking with top management down to roughly executive officers, who are generally over the age of 55 or so, mostdescribe their company as a good one. When I interacted withyounger employees as an auditor or consultant, however, I
often found that they did not feel the same way. It seems that
corporate management notices that gap less often than one
would think.
I t o I think they often don’t. The way that people derivehappiness at work varies by generation. Retiring employees
often express gratitude for having been able to work at theircompany steadily all that time. That is, their happiness is basedon memory. For younger generations, however, happinessbased on experience—on whether or not what they are currently experiencing is useful and meaningful to them—is more
important. If management fails to understand this, then after
three years or so, their younger employees will say “I’ve had
enough, thanks for everything, that was very instructive,” andbe on their way.

Corporate Culture—An Important Asset That
Must Be Made Explicit to Bridge the Gap
Tezuka And what about the second perspective?

Even when a company is making an effort to coordinate
corporate strategy and people strategy, there is always a gap, toa greater or lesser degree. Most companies have not taken steps
to elucidate that gap, even if they intuitively know it’s there. The
second perspective is thus the question of whether the gaps
between the current business model and the corporate strategy
to be pursued, and between the company’s current humanresources and its people strategy, have been ascertained.
The third perspective is whether the company has fostered a
corporate culture that encourages organizations and individuals
to change their behavior in a desired direction. Japanese companies tend to vastly underestimate the importance of corporate culture and the effort needed to maintain it. Indeed,
corporate culture is actually a highly valuable intangible asset.
Despite this, not many executives make an effort to change
their corporate culture. Very few even try to concretely ascertain whether their cultures are really as free and open as they
may claim.
Recently, the start of dialogue between companies andinvestors about their “purpose” has led to growing momentum
toward improving corporate culture.
Corporate culture is often said to be the very DNA of an organization or company. Actual biological DNA is naturally inheritedfrom generation to generation, but with companies, it’s not agiven. Without concerted, ongoing effort to pass it down, corporate culture tends to die out.
Google’s all-hands Friday meetings, called “TGIFs,” provide away for top management to keep their finger on the pulse of thecompany’s culture. By comparison, Japanese companies areoverly sanguine. They act as if putting the founder’s corporate
philosophy in a frame on the wall means it has been passed
down to employees. The only problem is, the philosophy neverleaves that frame.
Tezuka Recent integrated reports are carefully structured, withsections for corporate philosophy and messages from the management. Looking at these, it seems like they are making thekind of efforts you’re referring to.
I t o Most companies have a corporate philosophy or management philosophy; if they are actually discussing these,
there’s no need to also start talking about their “purpose.” I
think the important thing is for executives and employees tocreate corporate culture together, through dialogue. Merely having designated a philosophy does not mean it has actuallytaken root; what matters is whether or not that philosophy is
being applied to guide conduct.
Tezuka What issues do Japanese companies face in terms ofpeople strategy?
Ito

I t o In the 21st century, disclosure will grow only more
important. This is illustrated by the 11 areas outlined in the“Guidelines for internal and external human capital reporting”
created by the International Organization for Standardization(ISO).4 I think companies will start to disclose information abouthuman resource development and investment in some form. Of
course, wanting to present themselves in the best light possible, they tend to put a positive spin on such information in theirintegrated reports, but this is ultimately unimpressive unless it isbacked up by real enhancements. It is vital that companies areaware that information they disclose will be examined closely.
Tezuka When reading integrated reports, for example, I’d like toknow what type of people companies seek, based on theirstrategy, but most companies do not define such parameters.
I t o It seems to me that the recent focus on digital transformation (DX) has led, for the first time, to clarity in terms of theconcrete skills and experience that companies seek. But, what
specific skills and experience should they look for outside of
DX? Corporate strategy has to be finely honed before it can besynced to people strategy. And even when corporate strategy
has been well honed, I think a misconception—that people
strategy can be effectively implemented without a deep understanding of corporate strategy—is a major reason the challenges facing Japanese companies have gotten as big as they are.
Tezuka I have gone through global training at two of the Big
Four audit firms. Unlike in Japan, communication skills, forexample, are taught through training, rather than assuming that
employees will just naturally develop them. Team management,
project management, logical thinking, and problem-solving
techniques are all taught, as well. Rather than relying on skill
transmission through on-the-job-training, employees are armed
with specific techniques for use in their jobs.
I t o They are made explicit. In Japan, companies tend tofalsely assume that skills will just be transmitted on their own,that the skills don’t need to be explicitly put into words for
employees to acquire them. Because of this, companies don’t
spend all that much energy on making these essentials explicit.

13

Special Dialogue

In the 3P/5F Model Factor we were talking about earlier, oneof the five factors is diversity and inclusion of knowledge andexperiences. This factor goes beyond diversity of gender,
nationality, or other such personal traits. Diversity of knowledge
and experience is now extremely important. Individuals havedifferent knowledge and experience—the idea that Japaneseemployees are homogeneous just because they’re Japanese isan erroneous preconception.

TCFD and Climate-related Disclosure as an
Opportunity to Go Beyond Traditional
Accounting
Tezuka What do you think of the TCFD recommendations andclimate-related disclosure?
I t o As chair of the Japan TCFD Consortium, founded in May
2019, I hope to make such disclosure commonplace throughout
Japan. Japan ranks first globally, by a wide margin, in the number of corporations that have endorsed the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD).
Companies on the Tokyo Stock Exchange’s new Prime Market
will be practically required to provide disclosure in line with the
TCFD recommendations, which I think is a step in the right
direction. However, there are concerns that disclosure in securities reports will settle into hollow, generic patterns.
Tezuka It is legally mandated disclosure, after all.
I t o That said, I think that we have yet to see how much climate-related information will be disclosed in integrated reports.
In TCFD-aligned disclosure, the greatest problem is Scope 3.
There is no global standard. It is not clear how to account for
wide-ranging industries both upstream and downstream.
On top of this, mere disclosure is not enough. Who is providing assurance of the information’s credibility? In some cases, anarrow focus on disclosure itself could lead to the disclosure of

14

Special Dialogue

low-credibility information.
Gillian Tett, editor-at-large of the U.S. edition of the Financial
Times, sharply criticized the lack of visibility of auditors andaccountants—the guardians of disclosure—at COP26,5 callingit “a mistake.” For audit firms and the JICPA, I think this indicates tremendous opportunity, but also the possibility of new
types of competition.
Tezuka Audit firms are among the organizations with the mostpeople who can provide assurance regarding the credibility of climate-related information. However, globally speaking, I don’t
think there is yet adequate capacity for this kind of work. So, how
do we address this? In the EU, the current solution is to allow
certain people and organizations other than auditors to provide
assurance of non-financial information. Under this approach,such work is not our exclusive purview, but something we mustcompete for. I see this as an extremely important issue.
One of the most important things I wanted to ask you today
is about assurance regarding TCFD-compliant disclosure—specifically, the question of who will provide that assurance.
Also, in some industries, transition risks related to moving
toward carbon neutrality are extremely significant and could mostcertainly have a major financial impact. Given that, I also want to
ask whether other environment-related institutions can provide
assurance regarding climate-related information in financial contexts. Transition risk is the quintessential example; if transition
risks impact a company’s annual financial statements, auditors
cannot avoid the need to assess them. At that point, should theybase their audits on assurance provided by another institution?
I t o To reframe the issue, I think that the content of KAMs6
will change. If audit matters—KAMs—include climate-related
issues and transition risks, then the question becomes whether
auditors can responsibly write KAMs based on the assurances
provided by other institutions.
Tezuka There are around 3,900 listed companies in Japan, with
about 1,800 on the Prime Market alone. Simply in terms of volume, it’s true that it would be very difficult for audit firms’ sustainability teams to provide assurance for all of them. However, having
these auditors do this work facilitates financial audits and is more
economical for the companies being audited. I have come to think
that, given that we have exclusive authority to audit financial statements, it is our duty to take a proactive stance toward providing
assurance for climate-related information.
I t o That’s very commendable. This issue has concernedme for a long time. Just putting out information does not mean
all the related problems are solved. Unless the quality of theinformation is assured, sometimes it is better undisclosed.
I think that these factors are behind the International Financial
Reporting Standards (IFRS) Foundation’s creation of International
Sustainability Standards Board (ISSB) to develop standards forclimate- and other sustainability-related disclosure.
Tezuka I think that the IFRS Foundation created the ISSB partly

because some ESG and sustainability information ultimately
converges with financial information. As such, it would besocially and economically beneficial, and improve credibility, if astandard-setting body with excellent governance were to takethe lead in creating global standards to establish that linkage.
The question, then, is to what extent there is demand forsuch standards from society, and whether we can provide theresources to fulfill that demand.
The creation of such standards has begun with climate-related
disclosure, but do you think that global standards will be established for human capital or human rights issues, for example?
I t o Shareholder primacy is far from absolute in Japan anyway, but the global trend is now toward stakeholder capitalism,and existing ways of thinking about profit may become inadequate going forward. I propose a way of thinking about this withfour types of “profit.” The first is accounting profit. Second is
economic profit, calculated by deducting cost of capital fromnet profit. The third is social profit, based on ESG scores. And,the fourth is sustainability profit, defined using ROESG, a concept that integrates ROE and ESG. The ESG scores used inthese present both opportunities and risks. For example, companies could implement adjusted accounting in which costs
calculated using internal carbon pricing are deducted from profit. Or, for human rights, if the true human rights-related costs
can be identified, then, factoring these in could increase personnel costs, affecting net profit. I see two basic approaches
for handling such issues: either through additional disclosure,
on top of existing accounting, or by changing existing accounting methods to incorporate them.
Tezuka Developing accounting that far would mean going
beyond the traditional realm of CPAs.
I t o Yes, it would. This idea of profit is different from the realization principle-based conception, and maybe it’s not really“profit” per se, but in any case, it entails incorporating non-financial factors into the calculation of profit. It will take a vast
amount of work, which is why current efforts are focused on
first providing non-financial disclosure separately, in addition tofinancial. This approach cannot solve everything, though, and I
think it will come back to the issue of finding ways to provide
assurance regarding information and guarantee reliability.

Big Opportunities for the Accounting
Profession
Tezuka Lastly, do you have any message for CPAs or audit firms?

The two things I wanted to say today are that accountants must address the challenges facing the accounting industry with a sense of urgency, and, more importantly, that there
are big opportunities for the industry going forward.
The big opportunities lie in contributing to the solution of not
only the challenges facing companies, but those facing theItoentire planet. Until now, the accounting profession has, in asense, been closed in, existing mainly within the context of corporate audits. By seizing opportunities presented by taking on
bigger challenges, the accounting profession can greatly
expand its sphere of contribution. This is truly a matter of transformation, not mere improvement. It will require either existingaccounting talent to acquire new skills, or for people who havethe necessary expertise to join the accounting profession. Thisis precisely the same as the “re-skilling” in the third common
factor in the Human Capital Ito Review, and it comes down to
the gap between corporate strategy and people strategy. If
expanding its sphere of contribution is the accounting profession’s long-term “corporate strategy,” then the key is to determine the gap between that and its people strategy. Once theissues are identified, they can be solved through re-skilling, withthe current people acquiring new expertise, or through the
mid-career hiring of people who already have the right expertise. Either way, the solution requires action over the long term.
I think it may be time for the accounting profession to start creating a grand design for this.
Tezuka Thank you. It seems we are at a major turning point.
Right now, we are wrapped up in the audits of financial statements, but five years from now, perhaps our perspective will
start to look very different. Do we focus on re-skilling ourselves?
Or should we try to meet society’s expectations by partneringwith other experts? This discussion has made the need to getstarted with strategic efforts very clear to me.
I t o In either case, we may see organizational collaboration.
In addition to recruiting specialists from outside, dynamic collaboration between organizations may prove necessary.
Tezuka Yes, that is how much the industry is changing, and I
think it will only continue to get more interesting. I know you
are hard at work, and I look forward to seeing your continued
contributions to the growth of companies in Japan. Thank youvery much.
I t o Thank you.
1. Ito Review: The final report of the “Competitiveness and Incentives for Sustainable
Growth: Building Favorable Relationships between Companies and Investors”
Project (August 2014)
2. Ito Review 2.0: The report of the Study Group on Long-term Investment(Investment Evaluating ESG Factors and Intangible Assets) toward Sustainable
Growth (October 2017)
3. S
 X Study Group: The Ministry of Economy, Trade and Industry’s Study Group on
Dialogues that Contribute to Long-term Corporate Management and Investment for
Creation of Sustainable Corporate Value
4. G uidelines for internal and external human capital reporting: ISO 30414, releasedby the International Organization for Standardization (ISO) in December 2018, provides guidelines with the objective of considering and making transparent thehuman capital contribution to the organization in order to support sustainability of
the workforce.
5. C
 OP26: The 26th Conference of the Parties (COP) to the United Nations
Framework Convention on Climate Change, held in Glasgow, Scotland,
October 31 to November 13, 2021
6. K
 AM: Key Audit Matters. Required in securities reports for fiscal years ended
March 2021 and later.

15

Who We Are

Who We Are
The JICPA is Japan’s only self-regulatory body of CPAs. As mandated
by the Certified Public Accountants Act, the JICPA strives to guide,connect, and supervise CPAs well as improve their credentials so that

Activities
The JICPA was established under the Certified Public Accountants Act for the purpose of guiding, connecting, and supervising
CPAs as well as performing administrative work related to CPA registration. As a self-regulatory body, the JICPA engages in avariety of activities under the tagline “Building trust, empowering our future.” These include activities related to ensuring professional ethics, maintaining and improving the credentials of its members, and upholding the quality of their work.
Article 3 of the JICPA Constitution outlines the Institute’s activities as follows.

they can carry out their mission.

The Activities of the Japanese Institute of Certified Public Accountants(JICPA Constitution, Article 3)
1

 stablish standards of professional ethics for CPAs to abide by and work to maintain and improveE
such ethics.

2Implement measures to improve the qualifications of members, such as holding lectures and study
sessions related to the work of members.

3

 onduct research on the theory and practice of auditing, promote the use and adoption of auditingC
standards, and establish auditing systems.

4

 onduct research on the theory and practice of accounting, promote the use and adoption ofCaccounting principles, and establish corporate and other accounting systems.

5

 onduct research on the CPA system and the duties (including tax-related duties) of CPAs, and issue
C
recommendations and provide consultation to governmental and regulatory agencies as necessary.

6Design and implement measures to support proper auditing by members.

7

 rovide necessary support to members with regard to the work of CPAs, including providing consultaPtion and materials.

8

Provide mediation to help resolve disputes over the work of CPAs.

9 esign and implement measures for the education and training of individuals who pass the CPA examD
inations.

10 Perform administrative tasks related to the registration of CPAs, junior accountants, CPAs of othercountries, and specified partners of audit companies.
11 Other operations necessary to achieve the purpose of the Institute.

17

Who We Are

History
The Genesis and Evolution of the CPA System

Evolution

Japan’s professional accountant system dates back to the establishment of the profession of accountant based on the
Accountant Law in 1927. The period immediately after World War II brought advances in democratizing the nation’s economy,
including breaking up the zaibatsu industrial and financial conglomerates as well as the enactment of the Securities Exchange
Law in 1948. In the same year, the Accountant Law was abolished and replaced with the Certified Public Accountants Act. In
1949, eight stock exchanges, including those of Tokyo, Osaka, and Nagoya, were opened, and 1951 brought the first CPA
audits under the Securities Exchange Law. The CPA system thus emerged from the securities market’s need to ensure the trustworthiness of financial statements.
As the securities market expanded, the importance of CPA audits grew, and the Certified Public Accountants Act was amended accordingly. In 1966, to facilitate organized audits of increasingly large-scale corporate activities, a system of audit firms bearing unlimited joint liability was introduced.
With audits of incorporated educational institutions beginning in 1967 and the introduction of CPA audits based on the Act on
Special Provisions on the Commercial Code in 1974, CPA skills were no longer restricted to the securities market, and the needfor them spread throughout broader society. The 2003 amendment to the Certified Public Accountants Act put the mission of
CPAs in Article 1 of the Act and reinforced CPA independence. The following amendment of the Act, in 2007, strengthened
the quality control, governance, and disclosure requirements for audit corporations; reinforced the independence andposition of auditors; and revised the oversight and liability of audit firms.
The Audit Firm Governance Code was released in 2017, and the 2018 amendment of Japan’s AuditingStandards introduced the Key Audit Matters (KAMs). These and other initiatives are being advanced
to enhance audit transparency.
In these ways, Japan’s CPA system has evolved in step with the changes and development of the corporate community.
At the same time, companies, a primary subject of auditing, have undergone advances in corporate governance, including the introduction ofinternal control auditing at listed companies in 2008 and the application of the Corporate Governance Code in 2015. CPAs,
who perform audits, and companies, which undergo
them, are each working in their own roles tosecure confidence in capital markets.

GrowthAccelerating expansion of CPA work in Japan and abroad

ReformTransforming for a future of trust1991 Auditing Standards, Working Rules for Fieldwork, and Working Rules of Audit
Reporting amended
1992 Certified Public Accountants Act amended
CPA examination system reformed
1998 Continuing professional education (CPE) system launched
Commemorative ceremony and other activities marking the 50th anniversaryof the CPA system held
“Big Bang” accounting reforms begin
1999 Audit firm quality management review system enters effect
2001 Financial Accounting Standards Foundation (FASF) and AccountingStandards Board of Japan (ASBJ) established
Audit Practice Monitoring Board established
JICPA Building completed
2002 Auditing Standards amended
2003 Certified Public Accountants Act amended
CPA examination system reformed
2004 The JICPA becomes a special private corporation
Continuous professional education (CPE) system written into law
2005 Companies Act established
The Auditing Standards and Interim Auditing Standards amended; the Standards on
Quality Control for Audits established2006 Financial Instruments and Exchange Act established2007 The 17th Conference of the Confederation of Asian and Pacific Accountants (CAPA
Osaka 2007) held
Registration system for listed company audit firms enters effect
The Certified Public Accountants Act amended
Limited liability partnership system for audit firms enters effect2008 Internal control auditing and quarterly review systems enter effectCommemorative ceremonies and lectures marking the 60th anniversary of the
CPA system held
2009 Decision to allow voluntary adoption of International Financial Reporting Standards(IFRS)
2010 Tax-Related Work Subcommittee established2012 Professional Accountants in Business (PAIB) Council established;
The IFRS Foundation’s Asia-Oceania Office established in Tokyo
2013 Audit Risk Response Standards established2014 Auditing Standards amended
Provisions of the Companies Act regarding the selection and dismissal of accounting
auditors amended;
Public Accounting Council established2015 Corporate Governance Code enters effect2016 CPA audits of social welfare corporations and medical corporations begin;
Basic Accounting Education Promotion Council established;
Women in Accounting Professional Promotion Council established2017 Audit Firm Governance Code published;Council for Accountants Serving as Outside Directors and Corporate Auditors
established2018 Commemorative ceremonies and lectures marking the 70th anniversary of the
CPA system held
Auditing Standards amended
2019 CPA audits of agricultural cooperatives begin
Self-Regulation Monitoring Conference established
2020 Auditing Standards amended
2021 Standards on Quality Control for Audits amended
2022 Certified Public Accountants Act amended
Registration system for listed company audit firms written into law

Growing in step with Japan’s rapid economic rise1956 Auditing Standards and Working Rules for Fieldwork amended;
Working Rules of Audit Reporting issued
1961 Stock exchanges open second sections
Expansion in firms requiring auditing
1962 Cost Accounting Standards issued
1965 Discovery of numerous companies committing accounting fraud
Auditing Standards revised

Early Development
The foundations of the CPA system are established1948 The Certified Public Accountants Act established; Securities Exchange Law
rewritten
1949 The Japanese Institute of Certified Public Accountants founded;
Financial Accounting Standards for Business Enterprises issued

18

1966 Certified Public Accountants Act amended
The JICPA becomes a corporation;
The audit firm system enters effectOct. 1949–May 1956
Leased space on the 1st floor of the former Tokyo
Chamber of Commerce and Industry building(Chiyoda-ku, Tokyo)

May 1956–June 1963
Leased space on the 5th floorof the Daido Seimei Building(Chuo-ku, Tokyo)

June 1963–Feb. 1966
Leased space on the 1st floor of the Tokyo
Chamber of Commerce and Industry Building(Chiyoda-ku, Tokyo)

1967 CPA audits of incorporated schools begin
1973 The International Accounting Standards Committee (IASC) established;
Commemorative ceremony and other activities marking the 25th anniversaryof the CPA system held
1974 CPA audits under the Law of Special Measures of the Commercial Code begin

1951 The CPA audit system enters effect1977 System for CPA audits of consolidated financial statements enters effect(audits of equity method accounting begin in 1983);
System for CPA audits of interim financial statements enters effect;
The International Federation of Accountants (IFAC) established1953 The JICPA becomes an incorporated association

1987 The 13th World Congress of Accountants held in Tokyo

1950 Auditing Standards and Working Rules for Fieldwork (interim reporting)IssuedThe Offices of theJapanese Institute ofCertified Public
Accountants

Feb. 1966–Nov. 1969
Leased space on the 4th floor and in thebasement of the Tokyo Shoken Building(Chuo-ku, Tokyo)

Nov. 1969–June 1977
Leased space on the 3rd and 4th
floors of the Kabuki Kaikan(Chuo-ku, Tokyo)

Jun. 1977–Nov. 2001
Previous JICPA Building(Bunkyo-ku, Tokyo)

Nov. 2001–
Current JICPA Building(Chiyoda-ku, Tokyo)

19

Who We Are

Who We Are

Overview of the CPA Profession
1

2

Audits by CPAs

Japan’s CPA system was created alongside post-war securities market reforms, positioning CPAs as expert auditors for listedcompanies.
Subsequently, the Act on Special Provisions on the Commercial Code made audits of listed companies mandatory, after which
audits of a wider range of organizations became mandated by law, steadily expanding the fields in which CPAs perform audits. In
recent years, the use of CPA audits in the non-profit sector has been increasing, and, based on the Revised Agricultural
Cooperative Law promulgated on April 1, 2016, from fiscal 2020 onward, agricultural cooperatives associations with more than
¥20 billion in deposits and agricultural cooperative federations with more than ¥20 billion in liabilities will be required by law toundergo audits by accounting auditors (CPAs or audit firms).

(Persons)(Year)
1950

Statutory audits (audits required by laws and regulations)• Audits based on the Companies Act
Large companies, companies with audit and supervisory committees, and companies with nominating committees mustretain a financial auditor (Companies Act articles 327 and 328).
Furthermore, any stock company that so designates in its
articles of incorporation may retain a financial auditor.

• Shinkin banks

1960• Credit unions

1970• Labor banks• Incorporated administrative agencies• Local incorporated administrative agencies•N ational university corporations and the Inter-University
Research Institute Corporation•P ublic interest incorporated associations and foundations• Mutual insurance companies•A gricultural credit guarantee fund associations• Special purpose companies•T he Norinchukin Bank

• Investment corporations•R eports on expenses, etc., made using political party
grants based on the Political Party Subsidies Act• Incorporated educational institutions that receive
national or regional public subsidies• Incorporated educational institutions applying for
authorization with regard to an act of endowment•S ocial welfare corporations•M edical corporations•C rypto asset exchange service providers as specified in
the Payment Services Act•A gricultural cooperatives

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

Men

Women

Figures in parentheses show the numbers of men and women, respectively.

1,244 (1,240/4)
4,196 (4,171/25)
6,064 (5,996/68)

1980

8,817 (8,590/227)

1990

13,226 (12,235/991)

2000

21,289 (18,742/2,547)

2010

33,211 (28,320/4,891)

2021

•C
 onsumer cooperative associations•T he Open University of Japan• Limited liability trusts with certificate of beneficial interests

241 (241/0)•G eneral incorporated associations and foundations

Statutory audits include audits of the following:• Limited partnerships for investment

The number of JICPA members is steadily rising. As of March 31, 2022, the number stood at 33,215.
1951 saw Japan’s first registration of female CPAs (two individuals). Today, approximately 15% of Japan’s CPAs are women.
The portion of successful CPA examination candidates who are women has been around 20% in recent years, standing at 21.8%
in 2021, indicating that the proportion of women among JICPA members will continue to increase going forward, although raising
the proportion of successful female examination candidates remains an issue.
We have established targets regarding the proportion of women among our members and associate members and among
successful CPA examination candidates. We are examining measures to achieve these targets (see page 53).
JICPA Membership by Gender (At December 31)

The main types of audit performed by CPAs are as follows.

• Audits based on the Financial Instruments andExchange Act
Documents on financial accounting in the securities reports(balance sheets, profit and loss statements, and other statements) submitted by specified securities issuers must receive
an audit certification by a CPA or audit firms (Article 193-2,
paragraphs 1 and 2).

Number of CPAs in JapanTo become a CPA in Japan, an applicant must pass the CPA examinations (multiple-choice tests and essay tests), complete atleast two years of practical experience in the professional accountancy education program, undergo a professional accountancy
education program administered by the Japan Foundation for Accounting Education and Learning, and pass a final assessmentby the JICPA. After confirmation from the prime minister, the applicant’s name is added to the register of CPAs.
Steps to Registering as a CPA

CPA Examinations

Multiple-choicetests(four subjects)

Pass

Essay test
(five subjects)

Professional accountancy
education program
Pass• Obtain the requisite credits• Final assessment by the JICPA(five subjects)
Registration•S pecial-purpose financial statements

Certified Public
Accountant

Experience in administrative support, etc.

International audits include audits of the following:

20• Companies with shares listed on overseas exchanges orthat are applying for such listing•O verseas branches, subsidiaries, and joint ventures ofJapanese companies• Companies that have procured or seek to procure
funding overseas•J apanese branches and subsidiaries of overseas
companies• Minimum of two years   • May occur before or after examinations

21

Who We Are

Who We Are

Overview of the CPA Profession

2

CPA Examination Applicants and Number of Final Successful Candidates (numbers for 1989 and earlier are those for the previous two-tier test system)(Persons)

Successful candidates

Applicants (right axis)

3,000(Persons)

30,000Consulting

CPAs provide consulting and advice in all areas of management, including drafting management strategy, capital procurement,
establishing internal controls, securities listing, organizational reform, and financial due diligence.

21,255
16,310

1,500

528

2,730

4,025

4,942

5,735

14,192
10,870 12,532

10,265
2,229
1,378

1,102
596
0

70
1949

212

242

283

1959

1969

1979

1989

3

1,337

1,360

0

786

1999

2009

2014

2019

2021 (Year)

CPAs of Japan and of other countries practicing in Japan specified in the Certified Public Accountants Act are required to registeras members of the JICPA.
In addition, the types of individuals shown below may become associate members of the JICPA (non-mandatory).
• Individuals qualified to be a CPA in Japan or anothercountry specified in the Certified Public Accountants Act• Junior accountants

3• Individuals qualified to be a junior accountant• Successful CPA examination candidates• Specified partners of audit corporations

Japan’s Corporate Governance Code for listed companies was adopted in 2015 and amended in June 2021. The Code statesthat “Companies listed on the Prime Market should . . . appoint at least one-third of their directors as independent directors (twodirectors if listed on other markets)” and that “persons with appropriate experience and skills as well as necessary knowledge on
finance, accounting, and the law should be appointed as kansayaku [corporate auditors].* In particular, at least one person who
has sufficient expertise in finance and accounting should be appointed as kansayaku.” In accordance with these provisions, thenumber of CPAs serving as outside directors and corporate auditors has been rising, and currently stands at more than half of alllisted companies.
* Also known as Audit & Supervisory Board Members
To support CPAs working in a variety of fields, the JICPA has established a number of specialized councils. The number of registered members of each council and of the working groups, etc., within each council are as follows (as of March 31, 2022).
Name

TargetJICPA Members That Are Registered Tax Accountants(as of March 31, 2022)

Registered tax accountants
10,759(32%)

JICPA Members

Members

Small and Medium-Sized Audit Firm Liaison
Council

Small and medium-sized audit firms that
audit listed companies

Tax-Related Work Council

CPAs who perform tax-related work

Members:
Associate members:

Public Accounting Council

CPAs working in not-for-profit and public
sectors

Social Security Working Group*
Members:
2,670
Audit firms on the working group’s list:
91
Regional Public Entity Accounting and Auditing Working Group
Members:
800
Associate members:
2,173

Professional Accountants in Business (PAIB)
Council

CPAs that are employees of corporations

Professional Accountants in Business (PAIB) Network
Members:
Associate members:

Council for Accountants Serving as Outside
Directors and Corporate Auditors

CPAs serving as outside directors andcorporate auditors

Accountants Serving as Outside Directors and Corporate Auditors
Network
Members:
1,415
Associate members:
997

Women in Accounting Professional

Promotion Council Female JICPA members/
associate members

Tax-Related Work

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

22

Outside Directors and Corporate Auditors

Areas of CPA Activity

In addition to accounting, CPAs work in a wide range of fields and roles in society as accounting professionals.

1

CPAs work at corporations and other organizations in the private and public sectors. The number of CPAs working at organizations other than audit firms or sole practitioners’ office has been rising in recent years.

4

2004

Professional Accountants in Business (PAIB)

469 firms
8,860
6,107

2,298
487

6,542

* Reorganized into the NPO Accounting and Auditing Working Group as of April 1, 2022

33,21523

What We Do

What We Do
The JICPA implements a range of institute operations to contribute to the

Stakeholder Engagement
The scope of activities for CPAs is expanding, and their stakeholders are also increasing, both in number and diversity.
To ensure that CPAs can carry out their mission, the JICPA is proactively collaborating and communicating with stakeholders tobuild and enhance relationships of trust.

advancement of CPAs and the establishment and development of faireconomic society so that CPAs can better carry out their mission.

• Setting standards, preparing policies of practice and other publications, and discussing issues related to implementation, etc.
• Submitting opinions during public comment periods

Government
bodiesResponding to requests for comments,
making TV appearances, holding press
conferences (See page 54)• Participation in academic
conferences• Setting standards, preparing
policies of practice andother publications, and discussing issues related to
implementation, etc.

• Submitting opinions during
public comment periods• Participation in international
conferences

Mass media

Legislature

Requests related to industry issues
that require legal amendments, etc.

The JapaneseCertified Public
Accountant Politics
Federation

Academics

Economiccommunity

JICPA

International
institutions

Expertorganizations
Market actors

Setting standards, preparing policies of practice andother publications, and discussing issues related to
implementation, etc.

Lectures and Appearances by the Chairman
JICPA Chairman and President Tezuka attended numerous external lecture events. This provided opportunities to engage indiscussions with many stakeholders and reflect their opinions in the JICPA’s operations. The main external lecture events that he
attended in fiscal 2021 are as follows.
Sep. 10, 2021	Keynote lecture at the International Computer Auditing Education Association’s 2021 International Conference on Computer Auditingin Tokyo
Topic: The ways auditing should aim to evolve and technology
Sep. 29, 2021	Panel discussion appearance at the 19th Annual Aoyama Gakuin University Accounting Summit
Topic: Sustainability and ESG info
Oct. 8, 2021	Spoke at ACFE Japan Conference 2021 held by the Association of Certified Fraud Examiners Japan
Topic: How auditors should approach fraud
Dec. 6, 2021	Panel discussion appearance at the online seminar “Investing for Brighter Future—Value Creation Based on Mutual Understanding” held
by T. Rowe Price Japan, Inc.
Topic: Net zero, corporations, and investors—deepening mutual understanding
Jan. 26, 2022	Appearance at a session of the Nikkei SDGs/ESG Corporate Issues Symposium
Topic: Disclosure to win stakeholder trust25

What We Do

What We Do

Management Policy

Strategic Targets

The JICPA is an expert professional organization of CPAs, who are responsible for ensuring confidence in information while contributing to sound organizational governance. As such, the JICPA has, over the years, revised
existing forms of CPA auditing many times, proactively working to reform and improve the audit system.
Over the past several years, systematic efforts to improve audits have made great progress. For precisely thisreason, Chairman and President Tezuka and the entire executive team have determined that the JICPA must now
look beyond accounting audits and undertake efforts to reform institute operations from a long-term perspective,
envisioning the CPA industry in 10 or 20 years. To this end, they established the slogan shown below. Building
from this slogan, to define a vision and values for the JICPA, based on the mission of CPAs outlined in the Certified
Public Accountants Act and the tagline at the time, “Engage in the Public Interest,” we laid out the JICPA’s mission. In doing so, we identified issues that we must address and established five strategic targets to this end.

Six Key Issues• Reforming accounting audits• Involvement in the formulation of
accounting and auditing standards• Adapting to changes in corporate
disclosure

Strategic Target 1

Slogan“Move Forward to the Future”• Meeting society’s needs for CPA work
• Adapting to rapid membership gains andthe growing diversity of our members

Build Confidence in CPAs

Japan’s CPA system was created in 1948 to audit the financial statements of listed companies. Over the more than 70
intervening years, CPAs have worked constantly to protect confidence in capital markets through financial audits.
Society’s need for our profession and the contribution CPAs provide through their work are both fundamentally rooted insociety’s confidence in financial audits. We will continue working to build that confidence while also working to reinforce
hands-on auditing skill.
Strategic Target 2

The JICPA’s Mission• Adapting to changes in corporate activities
and technological innovation

Enhance Stakeholder Engagement

To fulfill the mission of CPAs contributing to the sound development of the national economy, coordination with a wide
range of stakeholders, including governmental bodies, market actors, and international institutions, is essential. By promoting constructive dialogue with stakeholders, we will strive to further build up relationships of trust.

• Build social confidence in CPAs
• Support the enhancement of the professional abilities of our members• Offer opportunities for members to exercise such abilities to contribute to society

VisionA professional organization, trusted by both its members and society, that makes the greatest possible
contribution to sound economic development and therealization of greater wellbeing throughout society

Aiming to realize thevision by achieving thestrategic targets

Values• We put the trust of our members and other stakeholders first• We esteem foresight, strategic thinking, and creativity• We strive to engage in constructive discussion and collaboration with stakeholders• We esteem mutual aid and cooperation and strive for open, highly productive
institute operations

26

Strategic Target 3

Secure and Develop Human Resources

The globalization of corporate activities, AI and other technological innovation, and other such factors are driving significant changes in the environment surrounding CPAs. Given these changes, to ensure that CPAs will continue to contribute to society in the future, we will redefine the qualities and abilities necessary in a CPA.
Furthermore, with efforts to promote the professional participation of women and growing numbers of CPAs working
within companies or as external corporate officers, the sphere of CPA activity has been growing increasingly diverse inrecent years. In response to this shift, we will advance diversity and inclusion initiatives.
Strategic Target 4

Meet Society’s Needs

Japan is facing many serious challenges, including a declining population and birth rate, demographic graying, and the
depopulation of regional areas. As such, enhancing the productivity and ensuring the management soundness of organizations deeply connected to the public interest is an urgent task.
Accordingly, the range of entities subject to CPA audits is expanding to include incorporated schools, regional public
entities, medical corporations, social welfare corporations, and agricultural cooperatives. We will work to ensure thatthrough audits and other work, CPAs contribute to the soundness of such organizations’ operations while contributing
to governance reforms and productivity gains, thereby supporting the revitalization of regional areas.
Strategic Target 5

Enhance the Productivity and Transparency of Institute Operations

Enhancing the productivity of the JICPA will be essential to achieving these strategic targets. As such, we are advancing
organizational reforms, including revising our governance system and promoting work style reforms for institute staff.
In addition, we are working to enhance transparency to fulfill the JICPA’s duty of accountability by providing timely,
appropriate information to society.

27What We Do

What We Do

Professional Regulation Initiatives
1

2

Professional Regulation Overview

Individual Case Review

Role and Function of Professional Regulation

Audit Practice Review and Investigatory Committee

As a self-regulatory body charged with maintaining the credentials of CPAs at a high level, the JICPA conducts activities to guide,connect, and supervise its members; seeks to maintain and improve the quality of the work of CPAs; and implements initiatives
to ensure society’s confidence in the work of CPAs.
The JICPA’s self-regulation comprises two core functions. The first is individual case review, which examines such matters as
the audit implementation status and appropriateness of audit opinions concerning individual audit engagements and issues
involving the professional ethics of CPAs. The second is the quality control review system, which provides guidance and supervision regarding the quality control systems of audit firms.
The JICPA operates under the self-regulatory apparatus shown below. Increasing transparency, providing society with timely
information, and ensuring clear, satisfying explanations are prioritized as key issues.

The Audit Practice Review and Investigatory Committee examines and investigates the implementation of audits by JICPA members and the appropriateness of their audit opinions on individual audit engagements, such as those related to companies’ timely
disclosure, matters reported in the media, and audit hotline reports. Based on its findings, the JICPA Chairman and President
then issues recommendations or instructions as necessary.
The committee also reviews and investigates matters concerning issues of ethics related to JICPA members and associate members, as well as other matters referred to it in accordance with the JICPA Constitution. Based on its findings, the JICPA Chairman
and President then issues recommendations or instructions to the members or associate members in question as necessary.
Furthermore, when there is concern that a member or associate member may have violated laws, regulations, or the JICPA
Constitution or other rules, the committee conducts a review and investigation. If the committee determines that there had beensuch a violation and that it requires review to determine whether disciplinary action is warranted, the JICPA Chairman andPresident requests a review by the Disciplinary Committee.
The Audit Practice Review and Investigatory Committee comprises no more than 17 members, of whom two are outside experts.
The committee issues compilations of the suggestions it has made based on its reviews to JICPA members for use as reference in the auditing work of CPAs.

Individual case review

Quality control at audit firms

Self-Regulatory Monitoring Conference
Monitoring

Review Board for Appropriate ProceduresNote: Only when a request forreview is madeNote: Only when a request forreview is madeDisciplinary Committee

Quality Control Committee

Disciplinary Committee
The Disciplinary Committee accurately and equitably evaluates matters for which it has received a review request from the JICPA
Chairman and President based on the Audit Practice Review and Investigatory Committee’s disciplinary action proposals. The
committee determines the disciplinary actions to be imposed and informs the members or associate members in question.
The Disciplinary Committee comprises seven members, of whom two are outside experts.
The committee issues compilations of cases it has decided to JICPA members as a resource to help them audit appropriately
and to maintain and improve their professional ethics.
JICPA members and associate members who have been sentenced to disciplinary action by the Disciplinary Committee may
request a review by the Review Board for Appropriate Procedures if a procedural violation or significant factual error could haveaffected the outcome of the Disciplinary Committee’s review.
The Review Board for Appropriate Procedures reviews such requests and either returns cases to the Disciplinary Committee or
dismisses them.

Types of Disciplinary Sanctions
Audit Practice Review andInvestigatory Committee

The following five types of disciplinary action may be imposed by the JICPA.
1 Reprimand

5 Request to the Financial Services Agency to impose such sanctions as

3 Expulsion from the JICPA (associate members only)

striking the individual from the CPA registry or issuing a dissolution orderto an audit corporation

4 Recommended deregistration from the JICPA(May be combined with items 1–4)

2 Suspension of the membership rights granted by the JICPA Constitution

When investigations find that matters examined require improvement but do not warrant disciplinary sanctions, the bodies
involved issue recommendations or instructions as needed.

Internal and External Disclosure of Disciplinary Sanctions
Disciplinary sanctions imposed by the JICPA are, per the JICPA Constitution, internally disclosed to members via the JICPA website (on a page only accessible to members and associate members), the JICPA newsletter, and postings in the JICPA offices.
Furthermore, the disciplinary sanctions imposed may be disclosed publicly if the severity of the underlying matter exceeds acertain threshold or the said matter is of great interest or import to society and the JICPA Chairman and President deems doing
so necessary in order to secure the confidence of society in the JICPA and the CPA system.
Summaries of cases that are still under investigation may also be disclosed publicly if the JICPA Chairman and President
deems doing so necessary in order to secure the confidence of society in the JICPA and the CPA system.

28

29

What We Do

What We Do

Professional Regulation Initiatives

Data: Individual Case Reviews
Reviews undertaken in fiscal 2022 are summarized in the chart below. Note that an overview of the activities of the individual
case review system is published separately (in Japanese).

3
1

Reviews in Fiscal 2022 (April 1, 2021 to March 31, 2022)

Audit Practice Review and Investigatory Committee

Cases carried forward

31

New cases

20

28

Requested review by the
Disciplinary Committee

131

Cases carried forward to thenext fiscal year

23

(Cases)(Cases)Disciplinary Committee

Review Board for Appropriate Procedures

Reviews completedCases carried forward

New cases

10

15¹

16

Requested review by the
Review Board forAppropriate Procedures

3

Cases carried forward to thenext fiscal year

9
(Cases)Completed Disciplinary Committee cases by result2
Disciplinary sanction

14

Recommendation

3

Cases carried forward

3

Reviews completed

2

New cases

3

Cases carried forward to thenext fiscal year

4

Disciplinary Sanctions Imposed in Fiscal 2022 (April 1, 2021–March 31, 2022)(Cases)Audit firms

30

Actions¹

Admonition

58

Suspension of membership rights

15

Recommended secession

38

Sanction request filed with the FSA

11

Expulsion

162

Admonition

1

Suspension of membership rights

2

Recommended secession0

Sanction request filed with the FSA

0Disclosure

Companies
Financial statements

Audit

2. The total of figures in this table differs from the number of reviews completed (presented above) because one case resulted in both a disciplinary
action and a recommendation.

Type of sanction

Shareholders, investors, etc.

1. These numbers differ due to cases that were closed after the Audit
Practice Review and Investigatory Committee decided to request areview by the Disciplinary Committee but before such request was made.

Individual case review system activity summary (in Japanese)
https://jicpa.or.jp/about/activity/self-regulatory/inspection/

Individuals

Quality Control Review System

In light of the provisions of the Certified Public Accountants Act and the public significance of auditing, since fiscal 2000, the
JICPA has operated a quality control review system for audit firms (audit firms and CPAs). The system is aimed at maintaining
and improving the quality of auditing as well as securing society’s confidence in audits.
Quality control reviews entail reviewing the status and implementation of the quality control systems of audit firms, notifying
them of the results, issuing recommendations for improvement or imposing appropriate measures as needed, and receiving
reports on the status of improvements made based on such recommendations. The system helps maintain and improve thequality of audits conducted by audit firms. The quality control review system is not intended to badger, penalize, or interfere in theformation of audit opinions by audit firms.

(Cases)

Reviews completed

Quality Control at Audit Firms

1. The number of individuals for the individuals category and the number offirms for the audit firms category.
2. The number of associate members who were subject to disciplinary
sanction by the Council due to violating an order to pay membership fees
issued in response to long-term delinquency (delays of one year or morein the payment of standard membership fees or chapter fees), or violating
an order to change their registration in the public register of CPAs (JICPA
Constitution Article 67-8).

JICPA Quality Control Committee

Quality control
review

Audit firm
Audit teamThe system includes two types of quality control reviews. The first is a regular review, which examines an audit firm’s overall quality control system and its operation. The second is a special review, which is conducted when needed to examine quality control in
specific fields of the audit firm involved or the quality control system and its operation with regard to specific audit engagements.
The Quality Control Committee conducts quality control reviews and prepares a quality control review report containing its findings pertaining to the status of the audit firm’s quality control system and its operation. This report is issued to the audit firm.
In principle, quality control review reports may not be disclosed to any third party. However, audit firms may disclose to third
parties summaries of their most recent quality control review results in the audit quality reports that they prepare.
Furthermore, audit firms are required to, at a minimum, communicate a summary of the findings regarding their quality control
systems and their operation to the client’s corporate auditors when the engagement involves companies that are legally bound toretain an accounting auditor (such as large companies defined in the Certified Public Accountants Act) or shinkin banks.
More information about the quality control review system and its implementation in fiscal 2022 is available in the Overview of
the Quality Control Review fiscal 2022.

Overview of the quality control review fiscal 2022 (in Japanese)
https://jicpa.or.jp/about/activity/self-regulatory/quality/31

What We Do

What We Do

Professional Regulation Initiatives

Data: Regular Quality Control Reviews
The number of audit firms undergoing regular reviews each fiscal year and a summary of the fiscal 2022 regular review results arepresented below.
Audit Firms Subject to Regular Review(Firms)Audit firms subject to regular review (left scale)

Audit firms that underwent regular review (right scale)

300(Firms)

150

238

234

200

95

93

215

89

210

209

197

101

198

96

190

206

84

83

209

100

76

100

50

Measures Based on Quality Control Review Results
Based on the results of a quality control review, the Quality Control Committee may decide to impose one of three types of measures on audit firms found to have inadequate quality control. These are warning, stern warning, and admonishment that theaudit firm withdraw from all or part of its auditing work.
When an audit firm registered on the roster of audit firms that engage in audits of listed companies or the roster of associate
registered audit firms (see below) is found to have extremely significant deficiencies and admonished to withdraw from its auditing
work based on the results of a quality control review, the Quality Control Committee will also reach a decision on striking the firmfrom such roster.
Monitoring by the Certified Public Accountants and Auditing Oversight Board
The Certified Public Accountants and Auditing Oversight Board (CPAAOB) is a government organ established within the Financial
Services Agency based on the Certified Public Accountants Act. The main operations of the CPAAOB are administering the CPA
examinations, reviewing and examining audit firms, and investigations and deliberations related to disciplinary sanctions for CPAs.
Based on the Certified Public Accountants Act, since fiscal 2005, the JICPA has reported on the status of quality control
reviews to the CPAAOB, and the CPAAOB monitors such reviews.

56

56

0

2

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 (Fiscal year ended March 31)

Fiscal 2022 Regular Review Results

Result with significant deficiencies

Result with extremely significant deficiencies

0 firms

Carried over to the next fiscal year

2 firms

5 firms
Regular reviews offirms conducted76

Result without significant deficiencies

Registration System for Audit Firms that Engage in Audits of Listed Companies

To further strengthen the audit quality control systems of audit firms that have audit agreements with listed companies, the JICPA
introduced a registration system for such audit firms in 2007. The Listed Company Audit Firm Subcommittee, established within
the Quality Control Committee, maintains an official roster of audit firms that engage in audits of listed companies as well as aroster of associate registered audit firms* that are published, along with an overview of each firm, on the JICPA website. Throughquality control reviews, the subcommittee makes decisions on allowing firms to be registered and related measures.
Audit firms that have been denied registration or been removed from these rosters may request a review by the Review Board
for Appropriate Procedures if a procedural violation or significant factual error could have affected the Quality Control Committee’s
decision.
The securities listing regulations of financial instrument exchanges in Japan require listed companies to engage auditors thatare registered on the roster of audit firms that engage in audits of listed companies or the roster of associate registered audit
firms.
* Audit firms that aim to audit listed companies in the future may, depending on whether they have specific plans to form audit engagements with a listed company, apply forregistration on the roster of associate registered audit firms in accordance with the stipulations of the JICPA Constitution. If such application is approved, they are registeredon the roster of associate registered audit firms.

69 firms

firms

Roster of audit firms that engage in audits of listed companies and roster of associate registered audit firms (in Japanese)
http://tms.jicpa.or.jp/offios/pub/

Firms Registered on the Roster of Audit Firms that Engage in Audits of Listed Companies

32

Type of regular review conclusion

Description

Result without significant
deficiencies

Presented when a regular review finds that the conditions of both 1. and 2., below, are met.
1. No significant non-conformities with quality control standards were found in the audit firm’s quality control system or its
operation as of the end of the period covered by the review.
2. No significant non-conformities with the audit firm’s quality control system were found in the audit firm’s quality control
system or its operation during the period covered by the review.

Result with significant deficiencies

Presented when, as a result of a regular review, there is concern about the possibility of material non-compliance withprofessional standards or applicable laws and regulations in the audit firm’s quality control system or its operation

Result with extremely significant
deficiencies

Presented when, as a result of a regular review, there is concern about the possibility of extremely material non-compliancewith professional standards or applicable laws and regulations in the audit firm’s quality control system or its operation(Firms)March 31, 2021

March 31, 2022

Audit firms registered on the roster of audit firms that engage in audits of listed companies

127

126

Audit firms registered roster of associate registered audit firms

13

16

Total

140

142

33

What We Do

What We Do

Professional Regulation Initiatives

4

Self-Regulatory Monitoring Conference Members (As of March 31, 2022)

Professional Regulation Monitoring

Self-Regulatory Monitoring Conference
The purpose of the Self-Regulatory Monitoring Conference is to monitor the JICPA’s overall self-regulatory operations and cases inwhich improvement is required to ensure a properly functioning system for self-regulation and secure greater understanding fromsociety, as well as to provide opinions and advice based on a broader perspective encompassing capital markets and social impact.
The Conference mainly monitors the operations of the individual case review system and quality control review system, which
are the core functions of the JICPA’s self-regulation. It also takes up CPA system-related regulations and other topics related toself-regulation as needed.
The Self-Regulatory Monitoring Conference comprises eight members. In light of the importance of securing independence
and transparency, seven of these members are outside members (one of whom is also an outside Council Member of the JICPA).
The one Conference member who is a JICPA member is not involved in the execution of institute operations.
Summaries of the proceedings of the Self-Regulatory Monitoring Conference and the materials used at its meetings are published on the JICPA’s website.

Self-Regulatory Monitoring Conference proceedings summaries and meeting materials (in Japanese)
https://jicpa.or.jp/about/activity/self-regulatory/quality/monitoring.html

Mari Kobayashi

Mari Sono

Professor, Graduate School of Political Science,
Waseda University; former President, Board of Audit

CPA; Former Commissioner, Securities andExchange Surveillance Commission

Apr. 1994	Associate Professor, Business Administration
Department, Fuji College
Mar. 2001	Earned PhD in commerce from Waseda University
Apr. 2001	Professor, Business Management Department, Fuji College
Apr. 2002	Professor, Tokyo Fuji University
Apr. 2003	Professor, Graduate School of Public Management,
Waseda University
Apr. 2012	Professor, Graduate School of Political Science,
Waseda University
Aug.2013	Commissioner, Board of Audit of Japan
Dec. 2018	President, Board of Audit of Japan
Aug.2019	Retired from Board of Audit of Japan
Aug.2019	Professor, Graduate School of Political Science,
Waseda University
Jan. 2021	Board Member, International Public Sector AccountingStandards Board (IPSASB)

Oct. 1976	Joined NISSHIN Audit Corporation (now Ernst & Young
ShinNihon LLC)
Mar. 1979	Registered as a CPA
Apr. 1992	Member, Business Accounting Council, Ministry of
Finance
Oct. 2002	Member, Secretariat of the Information Disclosure Board,
Cabinet Office (now the Secretariat of the Information
Disclosure and Personal Information Protection Review
Board, Ministry of Internal Affairs and Communications)Apr. 2005	External Comprehensive Auditor, Tokyo Metropolitan
Government
Aug.2012	Retired from Ernst & Young ShinNihon LLC
Dec. 2013	Commissioner, Securities and Exchange SurveillanceCommission
Jun. 2017	Outside Director, Nomura Holdings, Inc.
Sep. 2020	Auditor, Waseda University

Hirano Takeshi

Masato Matsuno

Managing Governor, Japan Exchange Regulation

Chairperson, Japan Audit & Supervisory Board
Members Association

Apr. 1989	Joined Tokyo Stock Exchange
Jun. 2011	Director, Strategic Planning Department, Japan
Securities Clearing Corporation
Jun. 2014	Director, Corporate Strategy Department, Japan
Exchange Group, Inc.
Jun. 2015	Executive Officer, Japan Exchange Group, Inc.
Apr. 2017	Standing Governor, Japan Exchange Regulation
Apr. 2021	Managing Governor, Japan Exchange Regulation

Message from the Conference Chairman

Aiming for Sustainable Accounting Professionals
Hisashi Yamaura, Chairman, Self-Regulatory Monitoring Conference• The Purpose of the Conference

Hiroshi Miyake

Masataka Miyazono

The purpose of the Self-Regulatory Monitoring Conference is to check, from an outside perspective, whether or not the self-regulatory activities implemented by
the JICPA are functioning appropriately and effectively, to reflect the results of such checks in self-regulatory activities to improve their effectiveness, and tomaintain trust in the work of CPAs by publishing information about these activities.
To fully achieve this purpose, four conditions must be met: 1. Timely and accurate provision of information to the Conference; 2. Securing adequate time fordiscussion and proceedings at Conference meetings; 3. The publication of the results of Conference activities and their appropriate use as feedback in the workof CPAs and JICPA operations; and 4. Securing opportunities to verify whether or not such results have been appropriately fed back as described above.
In this sense, there is still an aspect of trial-and-error to the Conference’s activities, but I am confident that it will help reinforce the foundations underlying
the work of CPAs by increasing social trust in that work.

Attorney

President, Government Pension Investment Fund

Apr. 1983	Registered as attorney (Daini Tokyo Bar Association)
Mar. 1993	Earned master’s degree in law from Graduate Schoolof Management and Public Policy
1999	Member, Personal Information Protection Study Committee,
Strategic Headquarters for the Promotion of an Advanced
Information and Telecommunications Network Society
2001	Member, Government Office Personal Information
Protection Legislation Study Group, Ministry of Internal
Affairs and Communications
Apr. 2004	Visiting Professor, Graduate School of Law, Dokkyo University
2006	Director, Broadcasting Ethics & Program Improvement
Organization2010	Member, Public Records and Archives Management
Commission, Cabinet Office
Apr. 2015	President, Daini Tokyo Bar Association; Vice President,
Japan Federation of Bar Associations
Mar. 2020	Withdrew as doctoral candidate after completing coursework at the Graduate School of Law, Kyoto University (Law)

Apr. 1976	Joined The Norinchukin Bank
Jun. 2011	Deputy President & Co-Chief Executive Officer, The
Norinchukin Bank
Jun. 2018	Retired from The Norinchukin Bank
Apr. 2019	President, Pension Fund Association
Mar. 2020	Retired from Pension Fund Association
Apr. 2020	President, Government Pension Investment Fund

Manabu Morimoto

Hisashi Yamaura

Vice-Chairman, Japan Securities Dealers Association

Outside Council Member, JICPA; Emeritus Professor,
Meiji University; former Commissioner, Board of Audit• My Perspective as the Conference Chairman
The Self-Regulatory Monitoring Conference has now met seven times, from the first meeting on February 18, 2020, to the latest on March 8, 2022. Based on
the Conference’s activities so far, as its chairman, I first wish to express my respect for the diligent efforts related to self-regulation on the part of the JICPA’s
Chairman and President, the Deputy President in charge of self-regulation, and the officers of related bodies and offices. The significant labor and cost they haveexpended to carry out the ideal of self-regulation are commendable.
At the same time, quality control reviews have found a number of inappropriate practices, which have led to individual case reviews, and at each meeting, wehear reports about incidents in auditing and other issues, all of which are very concerning.
In addition, criticism from society of JICPA members participating inappropriately or fraudulently in professional education is a cause for deep regret. It would
appear that a lack of respect for legal compliance and professional ethics has crept into certain parts of the industry. Fortunately, the JICPA swiftly took initialsteps to remedy the situation. However, in order to ensure the future of the CPA qualification, it is essential for not only the JICPA but also each individual CPA in
the industry to maintain a steadfast professionalism, and for audit firms and sole practitioners to implement thoroughgoing governance.

34

Apr. 1981	Joined Sumitomo Metal Industries, Ltd.
Apr. 2012	Managing Executive Officer and General Manager,
Personnel & Industrial Relations Department,
Sumitomo Metal Industries, Ltd.
Oct. 2012	Executive Officer and Head of General Administration
Division, Nippon Steel & Sumitomo Metal Corporation
Apr. 2015	Managing Executive Officer and Head of General
Administration, Nippon Steel & Sumitomo Metal Corporation
Apr. 2016 	Managing Executive Officer (Head of Office, Osaka
Office), Nippon Steel & Sumitomo Metal Corporation
Jun. 2019	Senior Audit & Supervisory Board Member, Nippon
Steel Corporation
Jun. 2020	Directors and Senior Audit & Supervisory Committee
Member, Nippon Steel Corporation
Nov. 2021	Chairperson, Japan Audit & Supervisory Board
Members Association

Apr. 1977	Joined the Ministry of FinanceJul. 2009	Director-General, Inspection Bureau, Financial Services
AgencyJul. 2010	Director-General, Planning and Coordination Bureau,
Financial Services Agency
Jun. 2013	Retired from Financial Services Agency
Sep. 2013	President, Japan Securities Research InstituteJul. 2014	Senior Managing Director, Japan Securities Dealers
Association
Jul. 2015	Vice-Chairman, Japan Securities Dealers Association

1991	Professor, Faculty of Law and Economics, Chiba
University
1994	Earned Ph. D. in commerce from Hitotsubashi
University
1997	Professor, School of Business Administration, Meiji
University
2005	Chairman, Audit Standard Committee, BusinessAccounting Council, Financial Services Agency
Feb. 2008	Commissioner, Board of Audit of Japan
Mar. 2013	President, Board of Audit of Japan (retired in May)
Sep. 2013	Professor, Graduate School of Professional
Accountancy, Meiji University
Nov. 2018	Awarded Order of the Sacred Treasure
Mar. 2019	Retired from Meiji University (Professor Emeritus)

35

What We Do

What We Do

Continuing Professional Education System
13

Overview

To maintain and enhance the qualifications of CPAs as specialized professionals and ensure that they adapt to changes in theaudit environment, CPAs are required to take courses through the continuing professional education (CPE) system.
The CPE system was launched in 1998 on a voluntary basis, in which the JICPA provided support for members’ self-directedstudy. In 2002, CPE was made mandatory for members as a facet of the JICPA’s self-regulation and, since 2004, CPAs havebeen legally required to take educational courses under the system by Article 28 of the Certified Public Accountants Act.
The CPE system comprises mainly a curriculum designed to help enhance professional ethics and specialized knowledge andskills. CPAs must earn at least 120 credits (equivalent to 120 hours of education) every three fiscal years, including certain mandatory training.

CPE Obligation Fulfillment

The percentage of CPAs who have fulfilled their CPE obligations in each fiscal year is shown below. In fiscal 2020, more than
98% completed their annual CPE obligations.
CPE Obligation Fulfillment Rate
(%)

100

Mandatory Training under the CPE System

97.6• Professional ethics training• Audit quality and fraud risk training (for CPAs engaged in statutory audits)• Tax-related training

CPA Search System (in Japanese)
https://www.jicpa.or.jp/cpa_search/ms.php

36

98.6

2016

2017

98.8

98.6

98.5

98.4

2019

2020

2021

0

2013

4

Implementation Status

CPE credits can be earned in several ways, including attending group seminars, taking e-learning courses, and reading
specified journal articles and submitting reports.
A breakdown of group seminars held in fiscal 2022 by fieldcovered is provided in the table at right.
Seminars cover topics aimed at honing professional andexpert knowledge in such areas as auditing and ethics. In
light of the COVID-19 pandemic, the JICPA has expanded
and reinforced e-learning and remote training to secureadequate training opportunities for CPAs.

98.6

97

Members who fail to meet their CPE obligations are subject to sanctions, which may include the publication of their names,
suspension of membership rights, request for disciplinary action by the Financial Services Agency, and prohibition fromengaging in auditing.
Information on the training and education of individual CPAs (indicating either that their CPE obligations were fulfilled, notfulfilled, or exempted) is available through the CPA search system on the JICPA’s website (in Japanese).

2

97.9

98.3

Seminars held

Field

Seminars held

Ethics and related topics

259

Accounting

72

Auditing (including fraud case study)

362

Tax

236

Consulting

162

Organizational environments

112

Skills

59

Total

1,262

2014

2015

2018

(Fiscal year)

Annual Conference

Since 1979, the JICPA has held an annual conference in which CPAs, outside experts, and business professionals from acrossthe country present their research. This conference is aimed at sharing knowledge, enhancing the capabilities of participants, andcommunicating with the public.
Normally, the annual conference is organized by one of the regional chapters. However, to prevent the spread of COVID-19,
the 42nd Annual Conference was held online, streamed from the Hilton Fukuoka Sea Hawk in Fukuoka City on September 17,
2021. The main theme of the 2021 event was “Accountants creating a dynamic future—building a sustainable world.” The conference served as an opportunity to think and learn about ways that CPAs can contribute to the achievement of the SDGs in thistime of uncertainty and change.
Etsuro Sotoo (Chief Sculptor of the Sagrada Familia) delivered the commemorative lecture on the theme of “Taking on the forever-unfinished.” The afternoon portion of the conference consisted of 10 research presentations covering a wide range of fields,from auditing to accounting, taxes, organizational environments, and consulting.
The conference was once again a success, with a total of around 1,000 JICPA members taking part.

37

What We Do

What We Do

Building Confidence in CPAs
1
1

JICPA Online Conference 2022
Purpose and Objective

The JICPA Online Conference 2022 served as an occasion for CPAs to reaffirm their mission in order to better fulfill their socialrole by putting it into action. Aimed at encouraging dialogue and cooperation between capital market constituents, the conference theme was “Building trust, empowering our future.” Though originally planned as an in-person event, to prevent the spreadof COVID-19, the event was recorded on March 10 and 11, 2022 and made available to the public via online stream on April 4
and 5, reaching approximately 1,500 viewers.

2

Session 3• Topic• Speaker

Enhancing hands-on auditing skills—ways to meet stakeholder expectations
Panelists	Ryuji Kawayama (Dean, Graduate School of Information & Communication, Advanced Academic Agency (now the Graduate School of Social Design))
Yoshihiro Matsuda (Partner, KPMG AZSA LLC)
Yuichi Yokoyama (Partner, Grant Thornton Taiyo LLC)
Kaori Terunuma (Director, Accounting Department, Taiyo Holdings Co., Ltd.)
Moderator Hidehiko Yuki (Executive Board Member, JICPA)

Session 4• Topic• Speaker

Program

JICPA Online Conference 2022 Archive Stream (Available online until September 31, 2022; in Japanese)
https://jicpa.or.jp/news/information/2022/20220418dii.html

Accounting audits to enhance corporate value—opinions from inside corporations
Panelists	Rumiko Tanabe (Corporate Auditor, Credit Engine Group, Inc. and others)
Kenichiro Okamura (Representative Partner, Kaede Accounting Advisory Co., Ltd.)
Toshio Sato (Executive Board Member, JICPA)
Tomoko Tanabe (Partner in Rotation, EY Japan/Partner, Ernst & Young ShinNihon LLC)
Takashi Niimi (Partner, PricewaterhouseCoopers Aarata LLC)
Moderator Ichiro Waki (Executive Board Member, JICPA)

April 5, 2022 (Tuesday)

Keynote Lecture
April 4, 2022 (Monday)• Topic
Initiatives for the post-pandemic capital markets• Speaker Tomoyuki Furusawa (Director-General, Policy and Markets Bureau, Financial Services Agency)• Summary	The lecture covered trends in sustainability disclosure and the 2022 amendments to the Certified Public Accountants Act.
	 In the area of sustainability disclosure, Mr. Furusawa explained how the Financial Accounting Standards Foundation announced in December
2021 the establishment of the Sustainability Standards Board of Japan (SSBJ) to advance sustainability disclosure-related initiatives in Japan. The
key role of the SSBJ will be to discuss wide-ranging sustainability issues, such as climate change, human capital, and human investment, and todevelop domestic sustainability disclosure standards based on international standards.
	 Next, Mr. Furusawa spoke about the amendments to the Certified Public Accountants Act, laying out three main challenges for auditing in light ofsocioeconomic changes in the environment surrounding CPAs: 1. Ensuring the reliability of audits, 2. Utilizing and enhancing the abilities of CPAs,
and 3. Creating environments conducive to high-quality auditing.

• Topic
The TSE’s market restructuring and expectations for CPAs
• Speaker Akira Kiyota (Director & Representative Executive Officer, Group CEO, Japan Exchange Group, Inc.)• Summary	Mr. Kiyota gave a lecture about market reorganization and expectations for CPAs in light of the April 4, 2022 restructuring of the Tokyo Stock
Exchange’s previous four markets (1st Section, 2nd Section, Mothers, and JASDAQ) into the Prime Market, Standard Market, and Growth Market.
Regarding the market restructuring, he explained that the existing market segmentation had been criticized as lacking a clear concept andinsufficiently incentivizing listed companies to continuously improve their corporate value, among other issues. To address these issues, the Tokyo
Stock Exchange decided to restructure the markets, with each based on a clear concept, in order to support the sustainable growth of listed companies and medium- to long-term corporate value improvement while providing an attractive cash equity market favored by a diverse range ofdomestic and overseas investors.
Next, he spoke about expectations for CPAs, saying that the audits performed by CPAs play an extremely important role in ensuring the reliabilityof listed companies’ financial information. CPAs are indispensable for enabling investors to make rational investment decisions based on disclosure, supporting proper price discovery and maintaining smoothly operating capital markets. He also spoke about the crucial importance of therole CPAs play in the corporate governance of listed companies and his strong conviction that their contribution will continue to grow in this area.

Session 1

Session 5• Topic
The JICPA’s future vision and new branding• Speakers Panelists	Tatsuya Arai (Executive Board Member, JICPA)
Tetsuya Mogi (Executive Board Member, JICPA)
Moderator Masahiko Tezuka (Chairman and President, JICPA)• Topic• Speaker

Keynote Lecture

Session 2• Topic	New trends in corporate disclosure—sustainability disclosure initiatives in Japan and overseas• Speakers	
Panelists	Toshitake Inoue (Deputy Director-General, Policy and Markets Bureau, Financial Services Agency)
Masamichi Kono (Global Advisory Board Member, MUFG Bank, Ltd./Trustee, IFRS Foundation)
Toshiya Mori (Chief Executive Officer, KPMG AZSA LLC)
George Iguchi (Chief Corporate Governance Officer and Executive Director of Investment Department, Nissay Asset Management Corporation
Satoshi Ando (Director, OMRON Corporation)
Moderator Takako Fujimoto (Executive Board Member, JICPA)38

The Future of Auditing
Panelists	Taisei Kunii (CEO, Deloitte Touche Tohmatsu LLC)
Takefumi Ueno (Professor, School of Management & Information, University of Shizuoka/Visiting Researcher, Center for Advanced Intelligence Project, RIKEN)
Hiroyuki Ikarugi (Head of Technology & Assurance Enrichment, Group Internal Audit (GIA), Takeda Pharmaceutical Company Limited)
Mitsuo Tsuruta (Executive Board Member, JICPA)
Moderator Masahiko Tezuka (Chairman and President, JICPA)

Session 6• Topic• Speaker

Reinforcing the foundations of small and medium-sized practices and their role in capital markets
Panelists	Masayuki Horie (Professor, Nihon University College of Commerce)
Kaori Nishiyama (Director, Disclosure Enforcement Office, Corporate Accounting and Disclosure Division, Policy and Markets Bureau, Financial Services Agency)
Tomoyuki Shinkai (Supervisory Representative Partner, Cosmos & Co./CPA)
Moderator Giichi Yanagisawa (Deputy President, JICPA)

39

What We Do

What We Do

Building Confidence in CPAs

2

CPA System Initiatives

Changes in the Environment Surrounding Accounting Audits
The CPA qualification is based on the provisions of the Certified Public Accountants Act. The Certified Public Accountants Act inforce today has been amended several times since its enactment, most recently 15 years ago.
Since the last amendment, corporate activities have further globalized, technological innovation in such areas as ICT and AI
has advanced considerably, uncertainty created by climate change, pandemics, and other such factors has increased, andefforts toward expanding corporate disclosure of non-financial information have advanced.
At the same time, the scope of CPA work has diversified, reflecting the changing expectations of society. For example, auditing, the exclusive purview of CPAs, has been adopted in systems for certain types of non-profit entities, and needs for assurance
services other than financial statement audits are increasing. Furthermore, the number of CPAs engaged in work within corporations, as outside directors and corporate auditors, in consulting, or other non-auditing work has grown.
In light of such changes in the economic environment, the expansion of the role of CPAs, and the diversification of work styles
in recent years, the CPA set up a project team to study whether and how the CPA system should be updated.

Amendment of the Certified Public Accountants Act
Given these changes in the environment surrounding accounting audits, the Advisory Council on the Systems of Accounting and
Auditing and the Financial System Council’s Subcommittee on Certified Public Accountant Regulation, established by the
Financial Services Agency, have discussed what will be necessary going forward to secure confidence in accounting audits. The
JICPA’s Chairman and President Tezuka, Deputy President Yanagisawa, and Deputy President Ogura took part in these discussions, providing input on behalf of the JICPA and the auditing industry.
These discussions identified seven pressing issues, listed below, which were discussed by the Diet during its ordinary session
in 2022, leading to an amendment of Certified Public Accountants Act.
1 Writing into law the registration system for audit firms that engage in audits of listed companies
2 Revising the Certified Public Accountants and Auditing Oversight Board’s authority to perform walk-in inspections

3

Initiatives in Auditing

1

Follow-Up After the Application of the KAMs

The JICPA commissioned Aoyama Gakuin University Professor Akira Kanie to conduct a case analysis of Key Audit Matters(KAMs) included in audit reports for the year ended March 2021. To conduct the analysis, Professor Kanie assembled a teamcomprising Sugako Ijima (Professor, Kurume University), Taiki Okano (Associate Professor, Hokkaido University), Sayako
Matsumoto (Associate Professor, Hokkaido Information University), and Kazuya Kinoshita (Professor, Kurume University). On
October 29, 2021, the JICPA published the results of this analysis under the title “Case Analysis of the First Year Mandatory
Application of KAM (Listed Companies in Japan, Fiscal year ended March 31, 2021)” (in Japanese; a summary version was published in English on April 26, 2022). The JICPA also conducted a survey of its members involved with related work regarding
auditors’ use of KAMs in the year ended March 2021 and published the results as a companion to the report.
In addition, the JICPA assisted the Securities Analysts Association of Japan in the preparation of a collection of good examples of KAMs for securities analysts, published February 2, 2022, by conducting the primary selection of examples using
mechanical standards.

2

Response to Revision to the Standards on Quality Control

The Business Accounting Council’s November 16, 2021 “Opinion on the Revision of the Standards on Quality Control for Audits”
replaced the content then in use from the International Standard on Quality Control (ISQC) 1 with content from the International
Standard on Quality Management (ISQM) 1 and ISQM 2 newly published in December 2020 by the International Auditing andAssurance Standards Board (IAASB), as well as the revised International Standard on Auditing (ISA) 220. In response, the JICPA
has convened expert drafting committees under the Quality Control Standards Committee to amend the “Quality Control
Standards Committee Report 1: Quality Control at Audit Firms” and draft a new committee report titled “Review of Audit
Engagement,” as well as an expert drafting committee under the Auditing Standards Committee to amend “Auditing Standards
Committee Report 220: Quality Control in Audits” as policies of practice. Exposure drafts of these reports were released in March2022 to solicit opinions more broadly. Furthermore, as of March 2022, the expert drafting committees are developing tools toensure that small and medium-sized audit practices can apply the policies in these reports smoothly.

3 Revising restrictions on work that can be performed by the employees of audit firms based on their spousal relationships
4 Adding “place of employment” to the registration data of CPAs working for companies, etc.

Adopting an International Quality Management Approach

5 Revising the period of practical experience required for qualification as a CPA (from two years to three years)

Background

6 Revising rules for deregistering CPAs who have not appropriately met their continuing professional education obligations
7 Promoting the JICPA’s accounting education activities(Including accounting education activities in the JICPA Constitution)

Of these, the JICPA regards the first, writing into law the registration system for audit firms that engage in audits of listed companies, as the most significant. The JICPA has operated this system on a self-regulatory basis, developing insight and expertise
and, going forward, will continue to apply these to design the specifics of the system and operate it within the provisions of thelaw to increase its effectiveness. At the same time, to facilitate understanding among capital market constituents, the JICPA will
promote disclosure by small and medium-sized practices and enhance support measures to reinforce the operating foundation ofsuch firms, striving to further secure audit quality.
Many important long-term issues remain to be discussed, such as adapting to the diversification of the work of CPAs and audit
firms; updating the CPA examinations, practical experience system, and training systems in light of changes in the abilities
required of CPAs, and adapting to the shift toward larger audit firms. We will work to address these issues going forward.

• Need for greater rigor in audit firm quality control systems• Need for standards that work for all audit firms, regardless of their scale orcomplexity

Recognition• Monitoring of the application of ISQC 1, etc.
• Ongoing outreach activities• Inspection reports from regulatory
authorities

Adopting the Quality Management Approach• Adopt the new Quality Management Approach to emphasize proactive quality management under the leadership of audit firms and to ensure flexibility inthe 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 content based on ISQC 1 and ISA 220 in line with the adoption of the new Quality Management Approach

Newly established International Standards on Quality Management (ISQMs) and amended ISA

ISQM 140

 uality Control Standards
Q
Committee Report 1

ISQM 2

 uality Control Standards
Q
Committee Report: Review of Audit
Engagement

ISA 220 (Amended)Amended AuditingStandards Committee
Report 220

41

What We Do

What We Do

Building Confidence in CPAs

3

Guidance on Sustainability and Other Extended External Reporting Assurance Engagements

Spurred by climate change-related initiatives, the promotion of ESG investment (investment with a focus on environmental, social,and governance performance) is drawing growing attention to non-financial disclosure. There is growing need for emerging formsof external reporting to investors and other stakeholders that include not only conventional financial information, but also non-financial information. In step with this growth, needs are also increasing for emerging forms of external reporting assurance services from CPAs and other external parties to back up such disclosure.
As part of its initiatives in this area, in August 2021, the JICPA published a Japanese translation of the International Auditing
and Assurance Standards Board’s “Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Sustainability and Other
Extended External Reporting (EER) Assurance Engagements.”
In light of the changes described above, the JICPA is working to identify and spread awareness of issues related to sustainability and other extended external reporting assurance engagements while advancing considerations toward the creation of guidance on such engagements.

4

1

Initiatives in Ethics
The Code of Ethics

The mission of CPAs, as stipulated in Article 1 of the Certified 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 rules that CPAs must observe in order to contribute to the public interest while maintaining a strong
awareness of their social mission and self-discipline. The Code of Ethics applies to all CPAs, not only when engaged in audits,
but also in consulting, internal accounting or other internal work at organizations, and all other work.
The International Ethics Standards Board for Accountants (IESBA) has established an International Code of Ethics forProfessional Accountants. The JICPA’s Code of Ethics are based on this code.
The JICPA also pays close attention to the IESBA’s Code of Ethics deliberations and proactively contributes opinions. Reportson the discussions at IESBA meetings are published in the Accounting & Audit Journal.

Reinforcing Practical Auditing Effectiveness

Under the strategic target “Build Confidence in CPAs,” the JICPA commissioned a study from the Graduate School of Social
Design (formerly the Graduate School of Information & Communication) of the Advanced Academic Agency with the aim ofproviding advice for reinforcing practical audit effectiveness based on the results of a survey of enterprises and auditors.
This study hypothesized that mismatches in understanding of audits between enterprises and auditors impact hands-on audit
effectiveness. Individuals working for enterprises and CPAs were surveyed about their understanding of CPA audits. Using thesurvey results, factors that could impact practical audit effectiveness were analyzed to lay out issues going forward and suggestions for reinforcement.

54Adapting to Digital Technologies and Remote WorkWork style reforms and the COVID-19 pandemic have caused remote work to rapidly become commonplace. In light of thischange, the JICPA is advancing measures aimed at responding to reforms in the operational processes and internal controls ofcompanies (such as doing away with requirements that documents be physically stamped) and promoting reforms in auditing
procedures by encouraging the use of digital audit evidence.
The JICPA’s Information Technology Committee has laid out an overview of key points and issues related to remote work in its
Report 56, which provides suggestions for dealing with changes in operational processes and internal controls due to remote
work, and Report 58, “Discussion Points and Issues Based on Overview of Remote Work (Suggestion).” Furthermore, we havepublished six articles about considerations for carrying out audits via a remote work environment, covering such topics as confirmation using digital tools and remote attendance at physical inventory counting.

2

Amendment of the Code of Ethics

The Ethics Standards Committee is currently working on a major amendment to the Code of Ethics. This amendment will overhaul the entire Code, including its organization and structure. It will also include content changes with significant practical impact,
such as changing the rules for compensation dependence and expanding prohibitions of simultaneous provision of non-assurance services, as well as revising duty of confidentiality rules. The amendment will also establish new provisions about the mindset with which CPAs should engage in their work, the role and conduct of CPAs in society, and the spirit of inquiry expected of
CPAs in their work. This amendment will be brought for discussion at the July 2022 Annual General Assembly. Explanations of
the changes and transcripts of roundtable discussions about them have been published in Accounting & Audit Journal and otherjournals, and the JICPA has posted videos explaining the amendment on its website.

Educational videos about ethics (in Japanese)
https://jicpa.or.jp/specialized_field/ethics/webinar.html

3

Measures to Enhance Transparency around the Code of Ethics

As described above, given that society expects CPAs to fulfill an important role, in formulating the Code of Ethics, it is important
to consider the perspectives of a wide variety of stakeholders in order to create fair rules. To this end, in September 2021, the
JICPA set up the Ethics Standards Committee Expert Advisory Council, comprising preparers and users of financial statements,
academics, attorneys, securities exchange representatives, and other outside experts, to hear opinions regarding the amendment of the Code of Ethics. Furthermore, to enhance the transparency of the Code of Ethics amendment process, beginning inMarch 2021, summaries of the meetings of the Ethics Standards Committee are published on the JICPA’s website.

Summaries of the Meetings of the Ethics Standards Committee and Ethics Standards Committee Expert Advisory Council (in Japanese)
https://jicpa.or.jp/about/activity/yuushikisya/ethics.html

4243

What We Do

What We Do

Meeting Society’s Needs

Building Confidence in CPAs

5

1

Initiatives in Corporate Disclosure

In September 2019, the JICPA established the Special Committee on Corporate Disclosure and Governance. On May 14, 2021,
the committee published a paper titled “Key Issues in Enhancing Usefulness of and Trust in Corporate Disclosure — Supporting
sustainable value creation cycle through interaction between disclosure and governance” (the “Special Committee Report”).
In addition, 2021 saw several major developments related to sustainability disclosure. In November 2021, the IFRS Foundation
announced the establishment of the International Sustainability Standards Board (ISSB). This new organization runs parallel to theInternational Accounting Standards Board (IASB). The Foundation also announced the consolidation of the Climate DisclosureStandards Board (CDSB) and Value Reporting Foundation (VRF) (the consolidation of the CDSB was completed in January2022). The JICPA welcomed these announcements and issued a Chairman and President Statement on November 4, 2021
pledging to work in close cooperation with related parties to proactively contribute to the formulation and practical application ofsustainability reporting standards. The development of standards has continued to advance at an exceptional pace, as the ISSB
published two exposure drafts of its first standards, “General Requirements for Disclosure of Sustainability-related Financial
Information” and “Climate-related Disclosures,” on March 31, 2022.
In Japan, meanwhile, the Financial System Council’s Working Group on Corporate Disclosure discussed the disclosure of climate change and other sustainability-related information in securities reports. Furthermore, the Financial Accounting Standards
Foundation (FASF) announced the establishment of the Sustainability Standards Board of Japan (SSBJ) to contribute opinionsinternationally and develop domestic standards, and, to this end, launched the SSBJ Preparation Committee.
Based on the Special Committee Report, the JICPA established the Corporate Disclosure Committee as a standing committee
in July 2021. The purpose of this committee is to implement concrete measures to enhance the efficacy and reliability of corporate disclosure and to respond to sustainability disclosure-related developments in Japan and globally.
Under the Corporate Disclosure Committee, we established the Green Bond Assurance Expert Committee, Sustainability
Expert Committee, and Non-Financial Disclosure Expert Committee to study issues in their respective areas of interest.

Opinions on Tax System Reform

In June 2021, the JICPA published its Fiscal 2022 Tax Reform Opinion Paper. This paper consists of two sections:“Recommendations Regarding the Tax System” and “Fiscal 2022 Opinions on Individual Tax System Reforms.”

Section 1

Recommendations Regarding the Tax System

We have worked to identify problems in Japan’s current social conditions, formulating recommendations on the tax system as apolicy tool to address these issues.
In 2021, we published the following eight recommendations in three areas.

I

Strengthening the Competitiveness ofJapanese Companies

II

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

1. Build an effective tax system for thedigital economy

1. Make it easy for anyone to file a final tax returnin line with the diversification of work styles

2. Introduce a new tax system for educational funding to produce more entrepreneurs and build a tax system toencourage the growth of startups

2. Reconsider existing tax systems to accommodate the diversification of work styles
3. Improve tax agency efficiency using DX while
protecting the rights of taxpayers

III

Correcting Economic Disparities

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

4. Consider introducing household-level taxation
as a way of addressing the low birth rate andpromoting women’s workforce participation

Council
Council Members

Executive Board

Section 2

President and Chairman
Deputy Presidents

This section mainly lays out opinions regarding the current tax system.
In 2021, this section included 84 “Policy Opinions.” Nine opinions related to structural problems in Japan’s tax system in the six
fields, listed below. The remaining 75 “Individual Tax System Opinions” related to specific tax system rules.

Executive Board Members

Corporate Disclosure Committee
Input and opinions on corporate
disclosure from experts

Areas of authority:• Corporate disclosure, including
non-financial information• Assurance services for non-financial
information• Sustainability

Policy Opinions

Coordination

Auditing
Standards
Committee

Auditing andAssurance
Practice
Committee

CPA
Profession
SystemCommittee

Green Bond Assurance Expert Committee

Sustainability Expert Committee

Non-Financial Disclosure Expert Committee

Considering practical guidelines for assurance services for reporting on the use of proceeds fromgreen bonds

Fact-finding research on disclosure related tosustainability, including climate change andbiodiversity

Studying issues related to ISSB prototype requirements and publishing opinions on sustainability
disclosure standard development

In addition to the deliberations of the Corporate Disclosure Committee and expert committees, the JICPA is actively putting out information about sustainability disclosure in light of the extremely rapid pace of developments in this area and their significant impact on
the work of JICPA members. To this end, we have launched a running column on the JICPA website titled “Global Sustainability
Insights” and held an online seminar on climate change in March 2022. Furthermore, we have launched a project team to examine
approaches to education to better enable committee JICPA members to acquire sustainability-related skills and knowledge.
The JICPA will continue to monitor domestic and international developments in sustainability and other non-financial disclosure,providing opinions as appropriate while implementing measures to support the work of its members.
44

Fiscal 2022 Opinions on Individual Tax System Reforms

1.Calculation of taxable income and adjustments to corporate accounting
under the Corporation Tax Act• Clarifying the differences between accounting and taxation in revising the
Corporation Tax Act, based on the assumption that corporate accounting
standards must be fully respected• Increased flexibility in permitted methods of confirming intent, including
relaxation of filing requirements to formally fix obligations and loss
accounting requirements, to avoid impeding the voluntary application of
IFRS and other proper financial reporting
2. Tax system for supporting business succession• Understanding the current application of the succession planning tax system and maintaining the system to contribute to smooth corporate succession at small and medium-sized entities
3. Preferential tax systems for venture capital investment• Further enhancing preferential tax systems for venture capital investment

4. Tax system to encourage investment in digital transformation• Introducing a temporary system to allow 100% tax write-offs of investments in digital transformation (DX) to help improve productivity at small
and medium-sized entities through DX investment
5. Consumption tax invoice system• Giving due consideration to reducing the administrative burden on small
and medium-sized entities and the economic environment in the adoption
and implementation timing of invoice systems and the adoption of digital
invoice systems• Establishing safe harbor rules to avoid imposing tax penalties for cases
when invoices are found to be fraudulent or invalid
6. The tax payment environment, etc.
• Organizing and unifying numbers used in tax procedures• Providing an adequate notification period in tax reform procedures to allow
the public to discuss such reforms in comparison with the level of public
services and the nation’s finances

45

What We Do

What We Do

Meeting Society’s Needs

2

3

Responding to IPO-Related Needs

In 2021, the number of companies that went public with initial public offerings (IPOs) in Japan reached 138 (including 13 on the
TOKYO PRO Market). This significant year-on-year increase speaks to the strong desire to IPO among companies. The JICPA is
working with audit firms, securities companies, venture capital firms, and stock exchanges to carry out ongoing measures to provide an environment conducive to stably providing high-quality audits for companies seeking to IPO.

• The JICPA’s Main IPO Support Measures• Publication of the List of Small- and Medium-Sized Audit Practices Offering Pre-IPO Audits• Publication of “The IPO Preparation Guidebook: Before Undergoing an Accounting Audit”• Publication of the List of Sole Practitioners Offering IPO Support• Publication of information about audit firms’ IPO support measures

Contributing to Regional Revitalization

The JICPA has 16 regional chapters across Japan and implements activities for local
communities in coordination with a wide range of stakeholders, including local companies, governments, educational institutions, and other professions.
CPAs contribute to regional revitalization through such work as support for industrial development, small and medium-sized entity operations, and the developmentof sound governance at companies and municipalities. To spread awareness of themany CPAs proactively engaged in such locally rooted activities, the JICPA published a special October 2021 edition of the Accounting & Audit Journal featuring
CPAs working to tackle challenges facing the future of regional communities.
This special edition highlighted the careers and community activities of regional
chapter chairs and the initiatives of the regional chapters, and included special features about CPAs working in collaboration with local stakeholders and exercising
their specific expertise in local communities.

CPA Support for IPOs (in Japanese)
https://jicpa.or.jp/business/ipokansa/
Accounting & Audit Journal Special Edition 3—CPAs in Regional Areas: Working to
Solve Challenges Facing the Future of Regional Communities (in Japanese)
https://jicpa.or.jp/news/information/2021/20211006aai.html

In addition, listings of companies being audited by second-tier or small- and medium-sized practices are growing steadily. In light of the great expectations for small- andmedium-sized practices to step up to audit companies aiming to IPO, on November 29,
2021, the JICPA held the IPO Audit Forum and Networking Session for Small- andMedium-Sized Practices Offering Pre-IPO Auditing (sponsored by the Financial Services
Agency, Japan Securities Dealers Association, and Tokyo Stock Exchange).
The first portion of the event opened with remarks from Toshitake Inoue, Deputy
Director-General, Policy and Markets Bureau, Financial Services Agency. This wasfollowed by a panel discussion on “the role of and expectations for small and medium-sized practices in IPOs,” at which panelists including Hisakazu Sakai (General
Manager, Investment Banking IPO I, SMBC Nikko Securities Inc.) and Shinobu Ikegawa,(Managing Director, Head of Initial Public Offering Dept. I, Daiwa Securities Co., Ltd.)
discussed recent developments in this area.
In the second portion, the Networking Session for Small- and Medium-Sized Practices
Offering Pre-IPO Auditing, 23 of the 65 firms on the JICPA’s List of Small- and MediumSized Practices that Audit Companies Seeking to IPO (published in October 2020) set up
booths to network with securities companies and other market constituents.
The event drew about 350 participants, including CPAs and IPO market constituents(individuals from startups, securities companies, venture capital firms, and stock
exchanges) and served to build relationships and deepen understanding of the IPOrelated initiatives of small and medium-sized practices.

2021 IPO Audit Forum Report (in Japanese)
https://jicpa.or.jp/news/information/2021/20211217ifg.html

The JICPA also implements activities to promote efforts by CPAs to support small and medium-sized entities. As part of these
activities, on September 22, 2021, the JICPA and Ministry of Economy, Trade and Industry (METI) held a joint online symposiumon the adoption of the new invoice system, focusing on corporate digital strategy and applying the SDGs to promote corporate
growth and contribute to communities. The symposium targeted JICPA members and associate members and representatives
from METI-designated companies driving regional growth. Experts explained and discussed the above topics and about how
companies can interpret the meaning of the SDGs and incorporate it into their businesses.
The first portion

METI-JICPA Joint Symposium
The introduction of the invoice system: corporate digital strategy and applying theSDGs to promote corporate growth and contribution to communities• Remarks from the organizers
		Masahiko Tezuka (Chairman and President, JICPA)
		Koichi Hamano (Director-General, Regional Economic and Industrial Policy Group and Director-General, Kanto Bureau of Economy, Trade and Industry, METI)

The second portion• Keynote Lecture: DX and Corporate Responses in Tax Work		
Chika Mochizuki (Professor, College of Law, Ritsumeikan University)• Panel Discussion: DX Changes in Back Office Operations
Moderator Toshihiko Shibusa (Council Member, JICPA)
Panelists	Chika Mochizuki
Manabu Mizutani (Auditor, E-Invoice Promotion Association; Director and Advisor, PCA Corporation; CPA)
Yoko Sakamoto (Representative Director and President, YDK CO., LTD)• Session 1 Applying the SDGs to Promote Corporate Growth and Contribute to Communities		
Misei Tsukamoto (Deputy Director, Regional Business Innovation Promotion Division, Regional Economic and Industrial Policy Group, METI; CPA)		Taichi Nushiki (Deputy Director to the Counselor, Office for the Promotion of Overcoming Population Decline and Vitalizing Local Economy, Cabinet Secretariat and Headquarters for the
Regional Revitalization, Cabinet Office)• Session 2 The Invoice System		Manabu Mizutani
		Toshio Sato (Executive Board Member, JICPA)

46

47

What We Do

What We Do

Securing and Developing Talent

1

The Qualities and Abilities Necessary in a CPA

In November 2021, the JICPA’s Task Force for Studying the Qualities and Abilities Necessary in CPAs published the“Report on Qualities and Abilities Necessary in a CPA” (“the Report”).* JICPA Executive Board member Keiko Sugaya
sat down with Executive Board Member Mitsuo Tsuruta, who chaired the taskforce, to hear more about the decision toconvene the taskforce and the findings of the report.
*This report is available only to JICPA members.

Creating the Report
Sugaya How did you go about preparing the report?
Tsuruta The taskforce met 13 times over nearly two years,

beginning in December 2019. Most of the taskforce members
were JICPA officers, but we also held 15 interviews with 17
outside experts and stakeholders—11 men and six women—
including attorneys, doctors, and other expert professionals,
as well as professors, newspaper editors, and analysts.
“Qualities” are often thought of as natural, inborn traits. In
this case, however, we were interested in qualities and abilities that are not inborn, but acquired. In trying to define thequalities and abilities of a CPA, we also had to decide thepoint in a CPA’s career that we were talking about. We settled
on the point at which an individual has passed their final
assessment and just registered as a CPA.
We began by establishing a common baseline understanding regarding the environment and current state of the profession, including the number of CPAs, people passing the CPA

examinations, and their employment. From there, we began
our discussion of the necessary qualities and abilities. These
discussions were quite intense, but with support from the
JICPA’s Research Group (the JICPA Research Laboratory), we
completed the report in November 2021.
During the drafting process, we referenced studies andreports about the necessary qualities and abilities published byoverseas professional accountant organizations, most notably
the International Education Standards (IESs) published by theInternational Accounting Education Standards Board (IAESB)
of the International Federation of Accountants (IFAC). The IESs
are separated into two groups: Initial Professional Development(IPD), for aspiring CPAs, and Continuing Professional
Development (CPD), for current CPAs. Our report focused on
the point in a CPA’s career when they are first registered, so
we mainly used IES 2, 3, and 4, which concern IPD.

The Five Qualities and Abilities
Sugaya What qualities and abilities did the taskforce identify?
Tsuruta The taskforce identified five areas of qualities and abil-ities necessary in CPAs going forward: Rapid adaptability andembrace of continued learning; expert knowledge; values,
ethics, and attitudes; skills; and general education. Of these,
expert knowledge; values, ethics, and attitudes; and skills
correspond, respectively, to IES 2 Technical Competence; IES
4 Professional Values, Ethics, and Attitudes; and IES 3
Professional Skills. We added two other areas to these.
One of these was general education. At first we thought ofthis as liberal arts, but we ultimately settled on general education to reflect the need for broad-ranging education and personal cultivation as the foundation underpinning the areas ofexpert knowledge; values, ethics, and attitudes; and skills, as48

well as the depth of character and human qualities necessary
to understand others.
The other area we added was rapid adaptability andembrace of continued learning. By this we mean the ability toproactively adapt oneself, not just passively respond. We discussed whether rapid adaptability was simply a part of“skills,” and whether an embrace of continued learning wasmore a matter of mindset, outside the bounds of “qualities
and abilities.” Ultimately, however, we established this as aseparate area that overlaps with the areas of expert knowledge; values, ethics, and attitudes; and skills.
Times of dramatic change require the ability to immediately
adapt, rather than constantly chasing after each change, as
well as an embrace of continuous learning to stay ahead of

Keiko Sugaya

Mitsuo Tsuruta

Executive Board Member
Transparency Report Drafting
Committee Member

Executive Board Member
in Charge of Aspiring CPA
Development

JICPA

JICPA

the rapid obsolesce of knowledge. This applies to everyone
from those who have just passed the CPA examinations tolong-time veterans. We cannot expect that the knowledge wehave today will, by itself, be adequate for the work of the
future. In that sense, this is the most important of the qualities
and abilities we defined.
Sugaya You said that the report is focused on newly registered CPAs, but it sounds like these qualities and abilities arenecessary for all CPAs.
Tsuruta At first we sought to keep the taskforce’s discussion
focused by limiting it to the requirements at a specific point intime. But, as we came to the final stages of preparing thereport, it became apparent that the five qualities and abilities
are important for all CPAs, regardless of their career stage or
the kind of work they do.
Even after a CPA retires from the workplace, they remain a
CPA until they are deregistered. In order to fulfill society’s
expectations, a CPA must of course continue to learn as anexpert professional, but I also think that being a respected
person is important.
Sugaya Returning to the five qualities and abilities, could you
go into more detail about “skills?”
Tsuruta The skills area corresponds to IES 3 Professional
Skills and comprises three skill types: conceptual skills,
self-management skills, and human skills. The taskforce wasdivided about how to handle so-called soft skills, like communication or interviewing. We ultimately decided that expert

knowledge, mainly in the areas of accounting, auditing, andtax work, is, by definition, essential to being an expert professional. As such, we positioned expert knowledge and values,
ethics, and attitudes as the core CPA qualities and abilities,
with skills as a third area important to enhancing and applying
the first two.
Conceptual skills are abilities related to taking a comprehensive view of social phenomena, conceptualizing themstructurally, and understanding how they function. The worldis changing at a dizzying pace, so resilient, flexible thinking ismore important than ever to defining and solving the challenges we face. In addition, as information becomes more accessible and knowledge rapidly becomes obsolete,self-management skills are essential to reflect on one’s own
abilities, circumstances, and ideals and seek self-directed
growth. The third skill type is human skills, which include
communication abilities.
Sugaya Even in audits, I think that effectively incorporating thenecessary expert knowledge and providing output to clients isextremely important. I see that this is not solely a question ofcommunication abilities. You mentioned values, ethics, andattitudes again; could you tell us more about that?
Tsuruta Values, ethics, and attitudes was another area thatthe taskforce spent considerable time on. The need to learn
and develop values, ethics, and attitudes as an expert professional is an issue shared by expert professions of all kinds. I
think these are probably acquired not via classroom study,49

What We Do

What We Do

Securing and Developing Talent

but gradually built up through work experience and byobserving more senior professionals at work. This area seems
to me somewhat ill-suited to e-learning. Also, values, ethics,
and attitudes are not just issues for newly registered CPAs toconsider; they are fundamental for CPAs throughout theircareers. Indeed, the qualities and abilities we defined are necessary in CPAs—all CPAs—not only those working as auditors or professional accountants in business. The specificspecialized knowledge required varies by type of work, but nomatter what the setting, the basic qualities and abilities necessary in CPAs are the same.
Almost all of the experts we interviewed pointed to theneed to keep learning, not waiting to be taught by others, but
thinking for oneself. Practical experience in the professional
accountancy education program is not enough to instill values, ethics, and attitudes; effectively teaching and developing
them within the organizations where CPAs work is essential. I
think that the JICPA should coordinate with audit firms andsole practitioners’ office and encourage them to take action.
Sugaya It’s difficult to boil these things down into a curriculum, so it seems vital to provide opportunities for, and assist

2

Maintain and improve the credentials of CPAs working as outside directors, outside corporate
auditors, professional accountants in business, and in other diverse areas

As Japan’s economy grows more sophisticated, complex, and international, the number of CPAs serving as outside directors,
outside corporate auditors, or professional accountants in business is steadily growing. In fact, a total of 2,672 CPAs serve as
outside directors or outside corporate auditors at 2,577 listed companies, or approximately 67% of all listed companies (JICPA
survey of securities reports filed for the April 2020–March 2021 fiscal year).
To encourage the expansion of the sphere of CPA activity and the smooth, efficient movement of human resources, the JICPA
has set up networks for these types of CPAs. To maintain and improve their skills, we hold training and other events for CPAs registered with these networks. The JICPA also operates the Outside Officer Candidate Introduction System to help connect companies considering the appointment of a CPA as an outside director or corporate auditor with CPAs interested in doing such work.
In May 2021, to highlight the work of CPAs across diverse social and economic spheres, we published the second special edition of the Accounting & Audit Journal, titled “CPAs Working at Diverse Companies: Diverse Work Examples.” This special edition
highlights the work of 11 CPAs who belong to organizations other than audit firms, working as executives or employees of corporations and public institutions, or as outside officers of listed companies, in order to show readers the expanding possibilities ofthe diverse careers of CPAs today.
in, reflecting and thinking about one’s experience.
Tsuruta After passing the CPA examinations, aspiring CPAs
go through the professional accountancy education program
and then take the final CPA assessment, at which point the
JICPA decides whether or not they meet the standards
required for registration as a CPA. After registration, CPAs
must engage in continuing professional education (CPE), and,going forward, also in CPD. Nevertheless, there is a limit towhat the JICPA can do. As such, I think it is crucial that CPAs
utilize their experience and the training systems at the audit
firms, accounting firms, or companies they belong to develop
the necessary qualities and abilities of a CPA.
The JICPA has, over the years, considered these issues
within the frameworks of the professional accountancy education program and CPE. There are many steps between thedecision to become a CPA and actually starting work as aCPA. Within the JICPA, we are advancing preparation forestablishing meetings and other bodies for considering how
to develop the abilities of aspiring CPAs throughout that process and implementing related measures.

The Publication of Accounting & Audit Journal Special Edition 2—CPAs Working at
Diverse Companies: Diverse Work Examples (in Japanese)
https://jicpa.or.jp/news/information/2021/20210419ebh.html

CPAs working as executives

Shigefumi Wada, Shiro Uchida

CPAs working as managers

Michiaki Matsumoto; Shoko Isshiki; Manabu Seto

CPAs working at regional public entities

Takiko Yoshida; Kyohei Yamamoto

CPAs working as full-time corporate officers

Yoshie Shinoki; Takahito Kudo

CPAs working as outside corporate officers

Miwa Furusho; Hiroshi Shirai

Closing Thoughts
Tsuruta A CPA remains a CPA until they are deregistered; forthat reason, I think that the CPA profession is extremely wellmatched to reskilling and recurrent education—recent topics
of interest. It is really a great profession in that, as CPAs, we
can continue to leverage our professional qualifications tocontribute to society throughout our entire lives, not only whileworking for an organization, but also thereafter.
Sugaya Each individual CPA functions as an autonomous
professional.
Tsuruta Yes, because for the intellectually curious, the longer

50

you engage in CPA work, the deeper it goes. And, as an individual takes on more responsibility, rising from staff to manager, the kinds of work they do and their perspective continue tochange. I hope that we can further communicate the appealof the profession in this regard going forward. And, to maintain the quality of audits, I think that we should also continue
striving to raise awareness among stakeholders of the training
systems and professional development being implemented.
Sugaya Thank you for taking the time to talk today.
Tsuruta Thank you.

51

What We Do

What We Do

Securing and Developing Talent

3

Develop professionals who can express professional opinions internationally and provide
them opportunities and support to do so

The JICPA and its members provide opinions to a wide range of international organizations, mainly in the areas of accounting andauditing. For example, the International Federation of Accountants (IFAC) is engaged in activities in the four areas of auditing andassurance, ethics, public sector accounting, and education. Through these activities, the IFAC expresses opinions on behalf ofprofessional accountants globally with the aims of supporting the development of high-quality international standards and guiding
initiatives to enhance professional accountants’ qualifications. Many individuals from Japan take part in the discussions of the
IFAC’s boards and committees.
Japanese CPAs Serving in Major International Institutions (As of March 31, 2022)
Organization, etc.

Position

Nominating Committee
Board
International Auditing and AssuranceStandards Board (IAASB)

Organization, etc.

Position

Aiko Sekine

MemberKohei Kan

Technical Advisor

Hisashi Sato

Member

Sachiko Kai
Kohei Yoshimura

Board of Trustees

MemberAiko Sekine

Board

MemberSatsuki Miyahara

Technical Advisor

Mamoru Honda

MemberMamoru Honda

MemberHironori Fukukawa*Technical Advisor

Masahiro Yamada

ASEAN Federation of Accountants (AFA)

International Public Sector AccountingStandards Board (IPSASB)

MemberMari Kobayashi*

Associate Member

Hisashi Sato

Technical Advisor

Takeo Fukiya

Associate Member

Tatsuya Arai

MemberYoshinori Kawamura

MemberShizuka Kaneda

ObserverKazuko Yoshimura

Professional Accountants in Business
Advisory Group (PAIB AG)
Public Policy & Regulation Advisory
Group (PPRAG)

MemberNaofumi Higuchi

Technical Advisor

Hironori Okada

MemberMemberIchiro Waki
Yoichi Mori

Public Interest Oversight Board (PIOB)Standard-Setting Boards Nominations
Committee

MemberTatsumi Yamada

Integrated Reporting Council

MemberMasahiko Tezuka

Integrated Reporting Framework Board

MemberYoichi Mori

Working Committee
Global Accounting Alliance (GAA)
Board

MemberHisashi Sato

Technical Advisor

Tatsuya Arai

Education Working Group

Shintaro Goto

Tax Working Group

Takae Akatsuka

Sustainability Working GroupMarie Ogata*
Names marked with * are not JICPA members.

Value Reporting Foundation (VRF)

The JICPA continuously works to develop professionals with the international knowledge and experience to represent Japan atsuch international organizations. These efforts include the establishment of a fund to provide support for members to take part instudy abroad programs.** In light of the COVID-19 pandemic, to prioritize the health and safety of participants and all involved, overseas study and dispatch programs have been suspended from the second term (September–December) of 2022 onward.

At the same time, to enhance the diversity of globally capable accounting human resources, we are proactively communicating
the appeal of global work through such means as posting articles and videos of interviews with CPAs working in international
fields on our website (“Vision for the future.”) and holding seminars.

Vision for the future. (in Japanese)
https://jicpa.or.jp/vision_future/52(1) Raise the proportion of women among JICPA members and associate members to 30% by fiscal 2049

Key Targets(2) Raise the proportion of women among successful CPA examination candidates to 30% by fiscal 2031

Confederation of Asian and Pacific Accountants (CAPA)International Ethics Standards Board
for Accountants (IESBA)

Small and Medium Practices Advisory
Group (SMP AG)

A world in which diverse CPAs have equal opportunities to succeed across a wide range of fields

Name

Member Development Committee(MDC)

International Panel of Accountancy
Education (IPAE)

We believe that the CPA industry should seek to build a society that embraces diversity. Accordingly, the JICPA aims to create aworld in which diverse CPAs have equal opportunities to succeed across a wide range of fields. To this end, the JICPA has
established key targets regarding the proportion of women among its members and associate members and among successful
CPA examination candidates to better promote the professional engagement of women in accounting, and is examining andimplementing measures to achieve these targets.

International Valuation Standards Council (IVSC)

MemberTechnical Advisor

Increase the appeal of the CPA profession by supporting the professional success of female CPAs

GOAL

Name

International Federation of Accountants (IFAC)

4

Monitoring
Indicators

Total number of information sessions about the
CPA system for junior high school, high school,
and university students and events targeting
female students (The Council sets and monitors
the targets.)

Total number of professional education and networking events targeting female CPAs (TheCouncil sets and monitors the targets.)

Proportion of women among candidates for leadership positions in the national JICPA andregional chapters, according to their respective
circumstances (The JICPA and regional chapters
set the targets, which the Council monitors.)

Actions

Measures to encourage young women to work
toward becoming CPAs

Measures to prevent women currently registeredas CPAs from becoming deregistered

Measures to enable women currently registeredas CPAs to engage further

Proportion of Women among JICPA Members and Associate Members

Proportion of Women among Successful CPA Examination Candidates

Percentage of women

Percentage of women

14.9%

December 2018

20.4%

December 2019

15.1%

December 2019

23.6%

December 2020

15.5%

December 2020

24.6%

December 2021

15.8%

December 2021

21.8%

December 2018

We are holding events for women working toward becoming CPAs to increase the appeal of the CPA profession.
Event

Online Event: So You Want to Be a CPA• Date	Saturday, March 19, 2022
• Program	This event connected women aspiring to be CPAs with the perspectives of women currently working as CPAs. The first portion, about the appeal of
the CPA profession, consisted of a panel discussion with young female CPAs working in a variety of fields. They spoke frankly about the ways theyfind their work enjoyable, how they spend their days off, their finances, and other topics ranging from the appeal of the profession to their private
lives. In the second portion, participants had the opportunity to submit questions they
had for female CPAs, which the panelists enthusiastically answered.

Panel Discussion Speakers• Panelists	Audit firm CPA: Aya Hiramitsu (Deloitte Touche Tohmatsu LLC)
Professional accountant in business: Sachiko Hatano (Director and Operating Officer,
ZIGExN Co., Ltd.)
Independent practitioner: Atsuko Yoseda (Director, willsi Co., Ltd.)• Facilitator Noriko Umeki (Council Member, JICPA)

53

What We Do

What We Do

Public Relations
1

Social Contribution Activities
The JICPA aims to contribute to society through the professional activities of CPAs and its support for such activities as well as awide range of other contribution efforts.

Press Conferences

The JICPA holds periodic press conferences as part of efforts tocommunicate about the JICPA to the public. In fiscal 2022, the
JICPA held seven press conferences. Summaries of the JICPA’s
press conferences are available on its website (in Japanese).

Fiscal 2022 press conference dates

2021

1

Wednesday, April 21

Friday, September 17

Tuesday, June 22

Friday, November 26

Thursday, July 15

2022

Thursday, February 24

Thursday, August 12
Summaries of past press conferences (in Japanese)
https://jicpa.or.jp/news/jicpa_pr/2018/kaiken17.html

Press conference2

Information Sessions on the CPA System

To spark as much student interest as possible while furthering knowledge andunderstanding of those who aim tobecome CPAs in the future, we hold information sessions about the CPA systemand the work of CPAs at high schools,
universities, and test prep schools. We
have also created explanatory videos andoffer information sessions online.

Initiatives Aimed at Building a Sustainable Society

The realization of a sustainable society is the foundation for the development of the national economy. With this in mind, the
JICPA established the Committee for the JICPA’s Challenges and Initiatives for Building a Sustainable Society. Based on anunderstanding of the goals and targets of the Sustainable
Development Goals (SDGs) as well as the issues facing Japanesesociety, this committee examines the roles of the JICPA and CPAs insociety as well as the challenges they face in helping build a sustainable society and the ways they can take action to do so.
Building on the challenges and approaches for addressing themlaid out in the Committee’s June 2019 interim report, “TheContribution of CPAs to Building a Sustainable Society,” to further
accelerate efforts toward the achievement of the SDGs, theCommittee formulated the SDGs Declaration in July 2021, declaringthat CPAs will proactively work to create a prosperous society andbuild a brighter future. Based on the 17 SDGs and the JICPA’s ideals
for the society of the future and CPAs, the SDGs Declaration sets out
three pillars of the contribution that CPAs can offer: Economy,
Society, and People and Environment.
We also created a pamphlet titled “Nurturing Trust to Build a
Brighter Future” and a video about the process that led to the SDGs
Declaration and the JICPA’s specific initiatives and action plan for
implementing the Declaration’s three pillars and key priorities.
Furthermore, the designated term of the Committee for the JICPA’s
Challenges and Initiatives for Building a Sustainable Society, which
was established as a special committee to deliberate issues in thisarea, came to an end. As such, in July 2021, the JICPA establishedthe SDGs Promotion Committee as a standing committee to promote
activities aimed at helping achieve the SDGs.

The JICPA SDGs Declaration

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

Activities in Fiscal 2022

• 32 sessions for high school students, with 2,560 participants• 49 sessions for university students, with 5,230 participants

Three pillars

Animated short about the work of CPAs (in Japanese)
https://jicpa.or.jp/sitemap/prmovie.html
A poster promoting the CPA examination

Economy:We create a secure society supported by reliable and valuable information.

Society:

We create a society that enables everyone to live a vibrant and prosperous life.

People and Environment:

We never stop innovating ourselves to live up to expectations of society.

JICPA has published its "SDGs Declaration"
https://jicpa.or.jp/english/news/2021/20211105ggb.html

54Video about the JICPA’s initiatives related to the SDGs
(in Japanese)
https://jicpa.or.jp/news/information/2021/20210924ehi.html

55

What We Do

What We Do

Social Contribution Activities

In addition, the JICPA sponsored the production of a TV program on the BS TV Tokyo
network in support for the program’s concept. Titled “Future Project 2021—The
Struggle of the Leaders of Tomorrow,” the program was about searching for hints forcreating a prosperous future.
One of the key priorities under the SDGs Declaration is “Contributing to regional revitalization.” The “Future Project 2021” program featured three CPAs working to overcome the challenging circumstances created by the COVID-19 pandemic acrossJapan by contributing to regional revitalization through businesses rooted in their local
communities in the fields of renewable energy, entertainment, and childcare.
CPAs across Japan are already engaged in activities that contribute to the achievement of the SDGs across a wide range of fields. The SDGs Promotion Committee willcontinue to publicize CPAs’ contributions to the SDGs within the JICPA and externallywhile proactively fostering awareness of the SDGs among its members.

“Future Project 2021—The Struggle of the Leaders of Tomorrow” now available online(Available online until November 30, 2022; in Japanese)
https://jicpa.or.jp/news/information/2022/20220112ejd.html

2

The JICPA’s Sustainability Initiatives

In 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 on its commitment to net zero emissions titled "Accounting Bodies Net Zero Commitment." TheJICPA is a signatory to the joint statement.

For our professional organisations, we commit to: Within the next 12 months, publish a net zero emissions pathway (including targets) and reportannually to show our GHG emissions reductions and trajectory towards net zero emissions.

For governments, we commit to:

Encourage and provide our members with the training, support and resources they need toestablish their own net zero pathways and reduce GHG emissions.
Provide sound advice to help governments create the policy and regulatory infrastructure necessary for a just transition to a net zero carbon economy.

The JICPA is advancing deliberations regarding the formulation and implementation of plans in the following areas to work toward net zero emissions.
• CO2 emissions calculation

Basic Accounting Education

Introduction
Since 2016, the JICPA has been implementing full-scale efforts to promote basic accounting education as part of its social contribution activities. Accounting literacy represents essential life-long knowledge and skills for everyone—not just those working as
specialists or in accounting and finance. The JICPA has established the Basic Accounting Education Promotion Council and isadvancing activities based on the concept that accountability is at the core of accounting.
In fiscal 2022, to further promote basic accounting education, we established three committees under the Basic Accounting
Education Promotion Council.

Secondary Education Materials Editorial Committee
Japan’s new curriculum guidelines that entered effect from 2021 for junior high schools and 2022 for high schools include “using
accounting information.”
However, the ways that “using accounting information” should actually be taught to students have been left up to teachers tofigure out. This committee is working to create educational materials to help teachers with this by researching and developing
specific lesson plans and other materials for use in class. In fiscal 2022, the committee created and published class support
packages for junior high and high schools.
Junior high school class support package(in Japanese)
https://jicpa.or.jp/about/activity/basiceducation/0-99-0-0-20210901_0.pdf• CO2 emissions reduction• CO2 emissions disclosure and reporting

The JICPA is taking proactive steps to address climate change and other pressing social issues. To this end, we have establisheda cross-functional Sustainability Team, which is considering ways of evolving institute operations toward net zero emissions andsupporting the initiatives of members and associate members aimed at net zero emissions.

Based on the Accounting Literacy Map published in 2020,
this committee considers and creates tools for learning
aspects of accounting literacy necessary at various life stages. In fiscal 2022, the committee particularly focused on
developing video content aimed at making accounting literacy
accessible for junior high and high school students.

2. Established in 2004 with the support of the UK’s Prince Charles, the A4S project works to help incorporate sustainability into corporate reporting and decision making.

Accounting Literacy Map (in Japanese)
https://jicpa.or.jp/about/activity/basic-education/literacy-map.html*Content to be released in July 2022.

“Hello! Accounting” Operation Committee“Hello! Accounting” is a free accounting class for elementary and junior high school students. The
easy-to-follow lesson, which makes use of examples using familiar economic activities, such as
the operations of a cake shop and takoyaki octopus treat stand, has been well received. Lessons
at schools and lessons open to the public have been held at more than 200 locations to date.
The “Hello! Accounting” Operation Committee considers the operations and content of “Hello!
Accounting” lessons nationwide. The committee’s main focus in fiscal 2022 was creating safe
lesson environments amid the COVID-19 pandemic, including online lessons and infection prevention measures for in-school lessons. In fiscal 2022, classes (in-person and online) for schools
were held 25 times, and those open to the public held 24 times, for a total of approximately
3,300 participants.
Poster for “Hello! Accounting” lessons

1. A collaboration between A4S and professional 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.

“Hello! Accounting” Lessons Held in Fiscal 2022

Saitama Chapter: 1 public; Tokyo Chapter: 8 public, 11 in-school;
Kanagawa Chapter: 4 in-school; Tokai Chapter: 2 public, 4 in-school; Keiji
Chapter: 2 in-school; Kinki Chapter: 12 public; Hyogo Chapter: 1 public;
Chugoku Chapter: 3 in-school; Shikoku Chapter: 1 in-school

56

High school class support package(in Japanese)
https://jicpa.or.jp/about/activity/basiceducation/0-99-0-0-20220411_0.pdf

Accounting Literacy Tool Development Committee

Outline of the Statement

For our members, we commit to:3

About “Hello! Accounting” (in Japanese)
https://jicpa.or.jp/about/activity/hello-schedule/

57

How We Operate

How We Operate
16 regional chapters, through which it strives to enhance the qualificationsof members and implements initiatives closely rooted in local communities.

The JICPA’s governance comprises the General Assembly, which serves as the topmost decision-making body; the Executive
Board and Council, which are responsible for the execution and oversight of institute operations; a range of advisory committees;
and the Board of Corporate Auditors and Self-Regulatory Monitoring Conference, which provide monitoring.
JICPA organs that particularly require transparency or expertise other than that of CPAs include outside experts.

organizational operations with transparency and neutrality. The JICPA has

Organization

As a self-regulatory body for the accounting profession, the JICPA conducts

Governance1

Organization (As of March 31, 2022)

General Assembly
Accounting auditor

Review Board forAppropriate Procedures

JICPA External
Advisory Committee

Executive Board

Nominating Committee

Board of Senior Advisors

Chairman and President

Compensation Committee

Deputy Presidents

Council

Chief Executive

Quality Control Committee

Listed Company Audit Firm Subcommittee

Audit Practice Review and Investigatory Committee
Dispute Mediation Committee

Ethics Standards Committee Expert Advisory Council

Audit Standards Committee Expert Advisory Council

Continuing Professional Education Committee

Practice Training Council
Final Assessment Committee
Auditing Standards Committee
Quality Control Standards Committee
Ethics Standards Committee

Tax Research Committee

Small and Medium Practices Policy Committee

Laws, Regulations and Systems Committee

Educational Institution Accounting and Audit Practice Committee

Public Sector Accounting and Audit Practice Committee

Not-for-Profit Organization Accounting and Audit Practice Committee

International Affairs Committee

Information Technology Committee

Industry-specific committees

Corporate Disclosure Committee

Accounting System Committee

Chiba Chapter

Tokyo Chapter

Kanagawa Chapter

Tokai Chapter

Hokuriku Chapter

Keiji Chapter

Kinki Chapter

Hyogo Chapter

Chugoku Chapter

Shikoku Chapter

Northern Kyushu Chapter

Southern Kyushu Chapter

Okinawa Chapter

Auditing and Assurance Practice Committee

Management Research Committee

Organizations in blue include outside experts.

Women in Accounting Professional
Promotion Council
Associate Members Council

Local Government Body Accounting and
Auditing Subcommittee
Public Accounting Council

Social Security Working GroupCouncil for Accountants Serving as
Outside Directors and Corporate Auditors
Professional Accountants in
Business (PAIB) Council

Tax-Related Work Council

Tax-Related Work Subcommittee

Hokkaido Chapter

Tohoku Chapter

Saitama Chapter

Small and Medium Practices Committee
Institute Journal Editorial Committee
Public Relations Committee

Qualification Review Committee

Registration Review Committee

Publications Committee

General Affairs Committee
SDGs Promotion Committee
Basic Accounting Education Promotion Council
Chapters
Regional Chapter Chair Committee
Free Job Placement Office (Tokyo/Osaka)Specific Attribute Committees

Disciplinary Committee

Council Members

Election Supervisory Committee

Aspiring CPA Education Professional
Regulation
Development
Public Relations
andPublications

Professional Standards and Practices
General Affairs
andRegistration

Self-Regulatory Monitoring Conference
Board of Corporate Auditors

Executive Board Members

59How We Operate

How We Operate

Organization

JICPA Officers (As of March 31, 2022)

Officers
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, twocouncil members and one corporate auditor are non-CPA outside experts. In addition, the chief executive may be either a CPA oran outside expert.

Chairman andPresident

Masahiko Tezuka

Deputy Presidents(7)

Giichi Yanagisawa Kazutoshi Kogure

Chief Executive

Hisashi Sato

Executive Board
Members (32)

Shuichiro Akiyama Tatsuya Arai
Naoaki Kobayashi Toshio Sato
Makie Suzuki
Hideki Chijimatsu
Hisatoshi Hirota Takako Fujimoto
Hidehiko Yuki
Yoshio Yukawa

Council Members(44)

Ikuko Akamatsu Kosuke Araki
Yuichi Ishizawa
Kuniyoshi Iwata
Noriko Umeki
Masaharu Ota
Yasushi Kaneko Yasuo Kameoka Yoichi Kubo
Seiji Sakashita
Toshihiko Shibusa Yuko Suzuki
Satoe Tsuge
Kenichi Tsutsumi Yusuke Nakano
Hayato Miyata
Yoshizo Miyamoto Shigeki Yagi
Akiyoshi Oba* (Chairman, Japan Investment Advisors Association)

Yasushi Inagaki
Koichi Inoue
Shinji Inoue
Kazuki Iwashita
Yoshitsugu Ogawa
Noriyuki Kakazu Shigeru Kajita
Shin Kato
Seigo Ko
Ryoichi Komatsu Akira Koyama
Hirofumi Sakai
Mitsuhiro Takemura Masao Tanaka
Yoshitaka Tanaka Emi Chujo
Masazumi Nishikawa Takao Furusho
Akihiko Masuda Hitomi Masuda
Yasuhisa Yajima
Koji Yasui
Yoko Yamada
Osamu Yoshii
Hisashi Yamaura* (Professor Emeritus, Meiji University/former Commissioner, Board of Audit)

Kazutomi Asai

Muneharu Otsuka* (Professor Emeritus, Waseda University/former Commissioner, Board of Audit)

Corporate Auditors(4)

Katsuhiko Ogata

Tatsuya Kato

Kiyonobu Takeuchi

Toru Kajikawa Yoshito Kaneyama
Hiroshi Shiina
Kiyohiko Shinokawa
Mitsuo Tsuruta Minoru Tobari
Mitsujiro Fuseya Naruhito Minami
Ichiro Waki
Yoshiki Watanabe

Hitoshi Hori

Kanako Ogura

Yoshiyuki Minegishi

Hiroki Kitagata
Sayaka Shimura
Toshiyuki Nishida
Satsuki Miyahara

Kazuya Kitazumi
Motoharu Shoji
Keiko Hayashi
Tetsuya Mogi

Hisae Kitayama

Shintaro Goto
Keiko Sugaya
Tadashi Hisamatsu
Toru Yasuhara

Names marked with * are outside experts.

Officer Responsibilities (as of March 31, 2022)
Division

General Strategy, Planning, andCommunication

Deputy Presidents/Chief Executive

Tatsuya Kato
Kiyonobu Takeuchi (International affairs)
Hisashi Sato

Professional Regulation

Kazutoshi Kogure

Auditing, Corporate Accounting
and Corporate Disclosure

Kanako Ogura

Giichi YanagisawaSocial Support
⑦

⑧

⑨

⑤

⑥
①
③

Kiyonobu Takeuchi④②

Human Resource Development
General Affairs

60

1 Masahiko Tezuka

2 Kanako Ogura

3 Hisae Kitayama

4 Kazutoshi Kogure

6 Kiyonobu Takeuchi

7 Tatsuya Kato

8 Yoshiyuki Minegishi

9 Hisashi Sato

5 Giichi Yanagisawa

Regional Chapters

Giichi Yanagisawa
Kiyonobu Takeuchi
Hisashi Sato
Yoshiyuki Minegishi (Chairman)
Hisae Kitayama (Vice Chairman)

Role

General Strategy and Planning
Public Relations
Spokesperson
International Affairs
External Affairs
SDGs
Rulemaking and Operational Development
Research and Publishing
Quality Control
Audit Practice Review and Investigation
Disciplinary Review (facilitator)
EthicsAuditing and Quality Control Standards
Auditing, Assurance and IT
Industry-specific Accounting and Auditing
Corporate Accounting and Disclosure
Diversity and Inclusion
Taxes
Management
Support for Small and Medium-sized Entities
Regional Revitalization
Support for Small and Medium-sized Practices
Basic Accounting Education
CPA System and Laws
Public Sector Accounting and Auditing
Not-for-profit Organizations
Incorporated Schools
CPE
Aspiring CPA Development
General Affairs Management
Operational Management
Financial Management and Information Management
Regional Chapters

Executive Board Members

Tatsuya Arai
Tatsuya Arai
Tetsuya Mogi

Satsuki Miyahara
Toru Kajikawa

Kazuya Kitazumi

Keiko Sugaya

Mitsujiro Fuseya
Keiko Hayashi—
Toshiyuki Nishida
Sayaka Shimura
Hidehiko Yuki
Naoaki Kobayashi
Takako Fujimoto
Ichiro Waki
Yoshiki Watanabe
Kazuya Kitazumi
Toru Yasuhara
Tetsuya Mogi
Naruhito Minami
Makie Suzuki
Yoshio Yukawa
Hiroshi Shiina
Shuichiro Akiyama
Minoru Tobari
Yoshito Kaneyama
Mitsuo Tsuruta
Tetsuya Mogi
Hiroki Kitagata
Keiko Sugaya
Tetsuya Mogi
Motoharu Shoji
Hideki Chijimatsu

Hisatoshi Hirota

Makie Suzuki
Toshio Sato

Shintaro Goto

Kiyohiko Shinokawa
Tadashi Hisamatsu

61

How We Operate

How We Operate

Organization

JICPA External Advisors Committee

Nominating Committee

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.

Candidates for the position of chairman and president are solicited from among the officers elected by JICPA members. The
Nominating Committee then selects the candidate it views as best suited, whom it recommends to an assembly of the newly
elected officers and, by receiving their confidence, the chairman and president is selected.
The Nominating Committee comprises 16 members, two of whom are non-CPA outside experts. The committee selects candidates to recommend for chairman and president based on dispassionate, objective considerations of important factors, including
candidates’ understanding and awareness of the mission of CPAs and the JICPA’s operations, as well as the individual’s eagerness to concentrate on said operations.

External Advisory Committee Members (As of March 31, 2022)

Naoki Izumiya

Akira Kiyota

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

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

Apr. 1972	Joined Asahi Breweries, Ltd.
Mar. 2003	Director, Asahi Breweries, Ltd.
Mar. 2004	Managing Director, Asahi Breweries, Ltd.
Mar. 2009	Senior Managing Director and Senior Managing
Corporate Officer, Asahi Breweries, Ltd.
Mar. 2010	President and Representative Director, Asahi
Breweries, Ltd.
Jul. 2011	President and Representative Director, COO, Asahi
Group Holdings, Ltd.
Mar. 2014	President and Representative Director, CEO, Asahi
Group Holdings, Ltd.
Mar. 2016	Chairman and Representative Director, CEO, Asahi
Group Holdings, Ltd.
Mar. 2018	Chairman and Representative Director, Asahi Group
Holdings, Ltd.
Jun. 2018	Chairman, Japan Investor Relations Association
Mar. 2019	Chairman of the Board, Asahi Group Holdings, Ltd.
Mar. 2021	Honorary Advisor, Asahi Group Holdings, Ltd.

Apr. 1969	Joined Daiwa Securities Co. Ltd. (now Daiwa Securities
Group Inc.)
Apr. 1999	President, Daiwa Securities SB Capital Markets Co.
Ltd. (now Daiwa Securities Co. Ltd.)
Jun. 2008	Chairman of the Board and Corporate Executive
Officer, Daiwa Securities Group Inc.
Jun. 2011	Honorary Chairman, Daiwa Securities Group Inc.
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.

Ryuko Sakurai

Noriaki Shimazaki

Former Justice of the Supreme Court of Japan/
Former Director, Women's Bureau, Ministry of Labor

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

Apr. 1970	Joined the Ministry of Labour
Jun. 1998	Director, Women's Bureau, Ministry of Labour
Apr. 2001	Member of Cabinet Office Information Disclosure
Review Board (Chair of the Third Division)
Jun. 2004	Invited Professor, Graduate School of Law, Osaka
University (Labor Law)
Apr. 2007	Visiting Professor, Faculty of Law, Kyushu University(Labor Law)
Sep. 2008	Justice of the Supreme Court of Japan
Jan. 2017	Retired from Supreme Court of Japan

Apr. 1969	Joined Sumitomo Corporation
Jan. 2003	Member, Business Accounting Council, Financial
Services Agency
Jan. 2009	Trustee, IASCF Foundation (now 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 Asia-Oceania OfficeJun. 2016	Outside Director, Nomura Holdings, Inc.

Kosei Shindo

Mariko Bando

Representative Director and Chairman, NIPPON STEEL

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

Apr. 1973	Joined NIPPON STEEL CORPORATION
Jun. 2005	Director and General Manager, Corporate Planning
Division, NIPPON STEEL CORPORATION
Apr. 2007	Director (under the Executive Management System)
and General Manager, General Administration Division,
NIPPON STEEL CORPORATION
Apr. 2009	Executive Vice President (under the Executive
Management System), NIPPON STEEL CORPORATION
Jun. 2009	Representative Director and Executive Vice President,
NIPPON STEEL CORPORATION
Oct. 2012	Representative Director and Executive Vice President,
NIPPON STEEL & SUMITOMO METAL CORPORATION
Apr. 2014	Representative Director and President, NIPPON STEEL& SUMITOMO METAL CORPORATION
Apr. 2019	Representative Director and Chairman, NIPPON STEELCORPORATION

Nominating Committee Members (As of March 31, 2022)

Masahiko Tezuka
Hisae Kitayama
Akiko Asai
Yoshitsugu Ogawa
Masamichi Ouchi
Tatsuya Kato

Motoharu Shoji
Hideki Chijimatsu
Masahiro Togashi
Yusuke Nakano
Masazumi Nishikawa
Keiko Hayashi

Tadashi Hisamatsu
Shinnosuke Yamada
Naoki Izumiya*
Chairman, Japan Investor Relations Association/Honorary Advisor, Asahi Group Holdings, Ltd.
Kazuhiko Fushiya* Chairman, The Institute of Internal Auditors – Japan

Names marked with * are outside experts.

Compensation Committee

Apr. 1969	Joined the Prime Minister's Office
Jul. 1989	Director of Consumer Statistics Division, Statistics
Bureau, Management and Coordination 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

The Compensation Committee comprises five members, of whom two are non-CPA outside experts. The committee is charged
with deciding the compensation paid to officers (the chairman and president and chief executive) and policy for deciding suchcompensation, and making recommendations to the Council.
Compensation Committee Members (As of March 31, 2022)

Aiko Sekine
Atsushi Takada

Haruhiko Yamada

Noriaki Shimazaki* Outside Director, Nomura Holdings, Inc./Former Trustee, IFRS Foundation
Riichiro Takahashi* Attorney/Former Vice President, Japan Federation of Bar Associations
Names marked with * are outside experts.

Board of Councilors
The JICPA’s former chairmen and deputy presidents serve as councilors. The Board of Councilors meets three times a year andprovides advice as needed regarding improvements to the work of CPAs.
Councilors (As of March 31, 2022)

Hiroshi Nakachi (former chairman)
Akio Okuyama (former chairman)
Tsuguoki Fujinuma (former chairman)

Koichi Masuda (former chairman)
Shozo Yamazaki (former chairman)
Kimitaka Mori (former chairman)

Aiko Sekine (former chairman)
Masaji Suzuki (former deputy president)
Haruhiko Yamada (former deputy president)

Shigeru Takahama (former deputy president)
Atsushi Takada (former deputy president)

Kazuhiko Fushiya
Chairman, The Institute of Internal Auditors – Japan/
Former President, Board of Audit of Japan/ Former
Commissioner, National Tax Agency
Apr. 1967	Joined the Ministry of FinanceJul. 1999	Commissioner, National Tax Agency
Jul. 2001	Deputy Governor, National Life Finance Corporation
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 – Japan

62

63

How We Operate

How We Operate

Organization

2

3

Regional Chapters

The JICPA maintains 16 regional chapters covering all of Japan to guide, connect, and supervise CPAs across the country andhelp ensure that they provide consistent, high-quality services.
Chairmen and CPA members of the Regional Chapters (As of March 31, 2022)

Administrative Offices

The JICPA’s administrative offices comprise 22 groups within four divisions and the offices of the 16 regional chapters. Theseadministrative offices support the Group’s operations.
As of March 31, 2022, the divisions have a staff of 222 (154 men and 68 women), and the regional chapters a total staff of 108(57 men and 51 women). Of these, a total of 75 (59 men and 16 women) are qualified as CPAs.
Administrative Organization (As of March 31, 2022)

Chief Executive

Hokkaido Chapter

Hokkaido Chapter
Chairman:Kiyohiko Shinokawa
CPA members: 384(47)

Planning
Division• Planning: Planning and coordination related to the overall CPA system• Public Relations: Planning and coordination of public relations activities related to the JICPA’s business and operations• International Affairs: Planning and promotion of basic strategy concerning international matters• Publications: Planning, editing, publishing, and communications related to JICPA newsletters, journals, and other publications• Research (JICPA Research Laboratory): Surveys and research related to the CPA system and the work of CPAs, including
auditing, accounting, and tax matters

SelfRegulation• Quality Control: Quality control reviews and related administrative work as well as administrative work related to the Listed Company
Audit Firm Subcommittee• Audit Practice and Review: Individual reviews of the appropriateness of members’ auditing and audit opinions as well as necessary
measures• Discipline: Disciplinary action and other matters related to the standing 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

Professional
Standards andPractices• 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 and preparation 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 for members’ work
• Accounting and Corporate Reporting: Research, planning, and materials collection and preparation related to the theory and practiceof accounting of companies subject to audit under the Financial Instruments and Exchange Act or Companies Act and other for-profit
corporations• Corporate Disclosure: Administrative work related to research, planning, and materials collection and preparation regarding the disclosure of corporate information (including sustainability and other non-financial information and corporate governance information)• Non-Profit and Public Sector: Research, planning, and materials collection and preparation related to the theory and practice of accounting and auditing of incorporated schools, public interest corporations, and other non-profit corporations as well as public sector accounting• SMP – SME Networking: Research, planning, and materials collection and preparation related to measures for small and medium
practices and enterprises as well as administrative work related to diversity networking (the Internal Accountant Council, Council for
Accountants Serving as Outside Directors and Corporate Auditors, and Women in Accounting Professional Promotion Council)• Research and Consultation: Consultation desk for inquiries from members regarding auditing and professional ethics

General Affairs
Division• General Affairs and Legal: Operations of the General Assembly, Council, Executive Board, committees and other bodies, the establishment, amendment and abolition of elements of the JICPA Constitution and other rules, and the handling of contracts, registrations, lawsuits, and other legal procedures• Regional Chapters: Administrative work related to liaison and coordination with the regional chapters (including the operations of theRegional Chapter Chair Committee)• Facility Management: Administrative work related to the management and operation of the JICPA Building, congratulatory, condolence, and other benefits for members and associate members, and the Associate Members Council• Personnel: Administration related to personnel affairs• Member Registration: Registration of CPAs, junior accountants, CPAs of other countries, and specified partners of audit corporations• Accounting: Drafting budget guidelines as well as preparing and managing budgets• Member Management: Requesting and receiving standard membership fees and auditing membership fees, as well as proposing andimplementing operational process improvements for the Headquarters and regional chapters• Continuing Professional Development: Operation of the continuing professional education (CPE) system• Final Assessment: Administration related to final assessments• Information Systems: Creation and management of information systems and operation of information security systems

Okinawa Chapter
Tohoku Chapter

Hokuriku Chapter
Keiji Chapter
Hyogo Chapter

Saitama Chapter

Chugoku Chapter

Tohoku Chapter
Chairman:Yuichi Ishizawa
CPA members: 433(47)

Tokyo Chapter
Chiba Chapter

Northern Kyushu
Chapter

Kanagawa Chapter

Shikoku Chapter

Saitama Chapter
Chairman:
Masazumi Nishikawa
CPA members: 816(87)

Kinki Chapter

Southern Kyushu Chapter

Northern Kyushu Chapter
Chairman:
Hideki Chijimatsu
CPA members: 826(118)

Chugoku Chapter
Chairman:
Shigeru Kajita
CPA members: 496(50)

Hyogo Chapter
Chairman:
Hayato Miyata
CPA members: 847(124)

Keiji Chapter
Chairman:
Yusuke Nakano
CPA members: 714(106)

Hokuriku Chapter
Chairman:Seiji Sakashita
CPA members: 303(29)

Tokyo Chapter
Chairman:
Yoshiyuki Minegishi
CPA members: 19,496(2,998)Southern Kyushu Chapter
Chairman:
Kosuke Araki
CPA members: 223(20)

Shikoku Chapter
Chairman:
Osamu Yoshii
CPA members: 242(23)

Kinki Chapter
Chairman:
Hisae Kitayama
CPA members: 3,710(608)

Tokai Chapter
Chairman:Tadashi Hisamatsu
CPA members: 2,162(319)

Kanagawa Chapter
Chairman:
Masaharu Ota
CPA members: 1,672(203)

Chiba Chapter
Chairman:
Motoharu Shoji
CPA members: 801(100)

Divisions

Tokai Chapter

Director General

Okinawa Chapter
Chairman:Noriyuki Kakazu
CPA members: 90(11)

Regional chapters
Note: As of April 16, 2022, the administrative structure was reorganized, increasing the number of administrative divisions from four to six.

Note: Numbers in parenthesis indicate the number of female members.

64

65How We Operate

How We Operate

Financial Summary
Key Financial Indicators (Years ended March 31)

1(Millions of yen)

Revenue Structure

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

Standard memberships are ¥6,000 per month, while associate memberships are ¥1,500 per month.

Membership fees borne equally by members
Standard fee / Chapter fee

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

Business revenue

Chapter fees are distinct from standard membership fees. Chapter fees support the specific operationsof each regional chapter and are borne by 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 the regional chapter.

Members who form agreements pertaining to the services described in Article 2-1 of the Certified Public
Accountants Act or the services specified in the membership 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 to such agreements.

2018

2019

2020

2021

2022

Ordinary revenues

6,502

6,643

6,837

7,260

7,445

Ordinary expenses

6,561

6,868

6,656

6,103

6,764

Net ordinary changes

(59)

(225)

181

1,157

680

Total changes of unrestricted net assets

(60)

175

855

1,160

688

Unrestricted net assets at end of year

11,381

11,557

12,412

13,573

14,262

Restricted net assets at end of year

903

879

849

853

850

Cash flows from operating activities

219

(112)

139

1,393

1,072

Cash flows from investing activities

753

(50)

90

(723)

(1,922)

Cash flows from financing activities

—

—

—

—

—

Cash and cash equivalents at end of year

3,291

3,128

3,358

4,028

3,178

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

Ordinary Revenues and Ordinary Expenses (Years ended March 31)

In the year ended March 31, 2022 (fiscal 2022), the JICPA collected standard membership fees of ¥2,332 million, regional chapter fees of ¥1,435 million, and auditing membership fees of ¥3,193 million. The total of these fees, ¥6,961 million, represented
more than 90% of the JICPA’s ¥7,445 million in ordinary revenues for the year.

(Millions of yen)

Ordinary revenues

8,000
7,500

2

Financial Results for Fiscal 2022 and the JICPA’s Financial Administration

6,500

6,502 6,561

6,643

6,868

6,837

* As of the publication of this report, the fiscal 2022 financial results are still under calculation and subject to change. The final results will be published on the webpage below (inJapanese).

6,103

5,500
5,000

2018

66

2019

2020

2021

2022

Net Ordinary Changes and Breakdown of Ordinary Expenses (Years ended March 31)(Millions of yen)

Operating costs (left scale)

Administrative costs (left scale)

7,500
6,000

3,000

Net Ordinary Changes (right scale)

2,376

2,366

2,465

2,357

2,565
680

4,185
(59)

4,502

(225)

4,191

3,746

(Millions of yen)

1,200

1,157

4,500

1,500
Activity Reports and Plans/Budget and Financial Results (in Japanese)
https://jicpa.or.jp/about/activity/report/

6,764

6,656

6,000

In fiscal 2022, the JICPA recorded a positive net change, amounting to ¥680 million, on its statements of changes in net assets.*
Compared with fiscal 2021, ordinary revenues and ordinary expenses both increased. The increase in revenues reflected a risein standard membership and chapter fees due to an increase in the number of members, as well as a rise in auditing membership fees reflecting increased compensation for statutory audits. The increase in ordinary expenses was attributable to costs necessary to complete numerous measures during the final year of the JICPA’s current administration, despite cost reductions
associated with the ongoing COVID-19 pandemic, such as the cancellation or postponement of events and restrictions on travel.
In addition, to provide support for CPAs working in expanding and diversifying fields, the JICPA increased its administrative staff,
promoted work reforms to improve productivity, and upgraded systems and facilities, resulting in an increase in costs.
In September 2020, recognizing the importance of securing the financial resources to continue to strengthen frameworks forsupporting CPAs so that they can meet society’s expectations and needs, the JICPA established a financial structure reform project team. In addition to financial transparency, appropriate budget control, and cost reductions, the project team studied suchmatters as securing financial resources to cover expenses related to the expansion of the scope of members’ activities, as well
as how to sustainably structure the JICPA’s finances for post-pandemic institute operations. By identifying and discussing key
points based on an analysis of the JICPA’s finances, the project team recognized and studied a variety of issues facing the JICPA
related to its finances and adapting to the new social environment. The results of these efforts were published in December 2021
as “Recommendations for Ensuring Sustainable Finances for the JICPA.” We will continue to examine and discuss the JICPA’s
financial structure going forward.

7,445

7,260

7,000

Ordinary expenses

4,198

900
600
300
0

181

0

-300

2018

2019

2020

2021

2022

67

4-4-1, Kudan-Minami, Chiyoda-ku, Tokyo 102-8264, Japan
https://jicpa.or.jp/english/

August 2022
©The Japanese Institute of Certified Public Accountants
No part of this report may be reproduced without permission.