The FSA and the Certified Public Accountants and Auditing Oversight Board (CPAAOB) stated in “A Framework for Inspection / Supervision of Foreign Audit Firms, etc.” (September 14, 2009) that they will, in principle, rely on information requirements and inspections regarding foreign audit firms by the competent authorities of the firms' home jurisdictions, instead of seeking to obtain information from or conducting inspections on firms themselves, provided that (a) audit and public oversight systems in the firms' home jurisdictions are equivalent to those of Japan, (b) necessary information can be provided from the foreign competent authorities through appropriate arrangements of information exchange, and (c) reciprocity is ensured.
In the course of publication of the Framework, the FSA mentioned that it will disclose criteria for equivalency assessment. In this respect, the FSA publishes herewith an English translation of principles and criteria to assess equivalency of audit and public oversight systems to that of Japan.