Woof-woof: Auditing companies to get an international watchdog
16 January 2015
TOKYO — Financial authorities of 51 nations and regions in the West, Asia and Middle East are planning to set up an organization to supervise auditing corporations by 2017. The authorities hope that reinforced supervision will ensure confidence in auditors. Distrust in auditing firms has been mounting since 2001, when U.S. energy giant Enron suddenly went belly up. A series of accounting fraud scandals has followed.Japan’s Certified Public Accountants and Auditing Oversight Board, an independent regulatory body established within the Financial Services Agency, is a founding member of the new organization. The Financial Services Agency also hopes to plant the new organization’s headquarters in Tokyo.
Currently, the supervision of auditing corporations varies from jurisdiction to jurisdiction. Other financial sectors do not have so much leeway. The global banking industry is overseen by the Basel Committee on Banking Supervision, based in Basel, Switzerland. Insurers answer to the International Association of Insurance Supervisors, also in Basel. And brokerages are under the eye of the International Organization of Securities Commissions, in Madrid.
These bodies are authorized to set up rules and frameworks to supervise members.
Currently, big multinationals such as KPMG, Deloitte Touche Tohmatsu and PricewaterhouseCoopers claim large shares of the global auditing services market. They embrace a variety of clients, from international heavyweights to small hometown companies.