Audit Obligation in Japan
Do all companies in Japan have to be audited?
Not all corporations. The Companies Act requires that certain companies be audited every fiscal year.
The Companies Act requires large corporations, that is, stock companies with capital of JPY 500 million or more or liabilities of JPY 20 billion or more, to be audited by CPA or auditing firms.
In addition to the above, audits are also required for companies with Audit and Supervisory Committee or Nominating Committee. The same applies to companies that have voluntarily established accounting auditors.
The Corporate Law requires all companies to disclose financial statements. In Japan, it is common to publish a notice in an official gazette, a newspaper, or on the company’s website, but in the case of small and medium enterprises, there are cases where they do not comply with the law.