Kolomoitseva J.A. Usachev V.A.

Donetsk National University of Economics and Trade after Tugan-Baranovsky

Audit of Japan

The European style of double-entry bookkeeping was completely unknown in Japan until the middle of the XIX century, when the island nation under pressure from the U.S. finally abandoned the policy of isolation pursued since the beginning of the XVII century. It is believed that the double-entry bookkeeping was first introduced in Japan in 1865 during the Edo period [1, c. 291]. In practice, it began to be used after the relevant regulations of the National Bank of Japan (1872) and published by the Ministry of Finance of the normative document called Ginko Boki Seiko (method of accounting transactions in the bank).

In 1878, the stock exchanges were opened in Tokyo and Osaka, and then like mushrooms after the rain began to appear different stock companies. In 1890, the Commercial Code was adopted, according to which the joint-stock companies were required to provide the public with information about the available assets and balance sheet. It is from this year in Japan begins tangible progress in the development of accounting.

Significant role in the birth of the accounting profession in Japan also played the tax laws. Tax on income was introduced in 1896, after which, apart from the usual accountants, tax agents appeared, provides companies with professional advice in the field of taxation. Thus, at the end of XIX century in Japan, there are two categories of accountants - one kept records of the companies and preparing financial statements, while others specialize in tax accounting issues and provide advice.

Accounting records in accordance with the provisions of the Commercial Code of 1890 without fail be audited by the Statutory Auditor. The role of the auditor's staff, as pointed out by T. Cooke and M. Kikuyu, was similar to the role of the internal auditor in the West and from the certificate is not required to have a professional accountant. In fact, these people were called auditors nominally and virtually no control functions performed.

The Ministry of Agriculture and Commerce of Japan, which at that time had the highest authority in the matter, immediately conducted a study of accounting systems in the UK, USA and Europe. A summary of this study were published in 1909 under the title "Report on the study of systems [training] Certified Public Accountants." It should be noted that among the Japanese accountants at this time of active movement in favor of the adoption of the Law about the registered accountants. The first draft of such a law was prepared in 1914, but was rejected because of unresolved disputes. Total projects of this law tabled eight times, and only 13 years later (in 1927) about the Registered Accountants Act was finally passed.

The reason that early drafts of the law have been rejected, is that in Japan in the early twentieth century did not have the atmosphere that contributed to the adoption of the Company's auditor. Many questioned the need for such legislation. Even passed in 1927 law about registered accountants were still far from perfect and had a lot of differences from the British system of accounting that was initially identified as a sample. It did not include any provisions protecting accountants. Anyone who has studied accounting at university (college) or had at least one year of practical experience, could be registered as a professional accountant.

Thus, having a rather complicated way, there were two categories of Japanese professional accountants. The first of them - Certified Public Accountants - actually performs the accounting and auditing functions, and the second, combining tax accountants, specializes in tax accounting. Both professional groups have established a fairly complex requirements for the examination for the title of chartered accountant and created their own organizations.