The Financial Services Agency plans to work out a package of measures to promote the disclosure of corporate information in the wake of scandals committed by leading Japanese companies, agency officials said Wednesday.
The work is expected to lead to reform of Japan’s auditor system, the officials said.
While the Financial System Council, a government advisory panel, will begin Monday deliberations on broad ways of promoting corporate disclosure, details will be discussed at a working group to be established later this month.
The working group will discuss an expansion of disclosure requirements to include items such as cash positions and other vital corporate information, as well as chief executives’ analyses of their companies’ financial standings.
Other issues to be taken up by the group include ways of facilitating the disclosure of information related to fundraising and tender offers.
Based on recommendations from the advisory panel, the FSA will begin working out necessary ordinances by the end of the year.
“Japanese companies have completely lost international trust” because continued scandals have revealed the absence of corporate governance at the firms, said Takaaki Wakasugi, a professor in the graduate school of economics at the University of Tokyo.
Referring to a recent series of scandals involving leading firms such as Mitsui & Co. and Tokyo Electric Power Co., Wakasugi said, “It is imperative for Japanese companies to establish practical (in-house) monitoring systems.”
The FSA expects the promotion of corporate disclosure to help improve the nation’s auditor system. The system, however, has yet to fully implement reform measures recommended by the Finance Ministry in 2000, such as tougher supervision of auditing firms and reform of examinations for certified public accountants.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.