Press Conference by Kaoru Yosano, Minister of State for Economic and Fiscal Policy and Financial Services

(Excerpt)

April 7, 2006

Q.

Yesterday, the Japanese Institute of Certified Public Accountants (JICPA) announced that it would introduce voluntary regulations under which the auditing of listed companies would be based on a registration system, as a measure to tackle the misconduct of accountants. The Financial Services Agency (FSA) is planning to start discussions on reviewing the accountant system soon, but JICPA claims that it would be preferable to tackle it by voluntary regulations rather than government regulations. What are your thoughts on this?

A.

Looking into the history of bar associations would be helpful here. There is a law called the Practicing Attorney Law, which sets forth a so-called registration system that does not allow attorneys to practice unless they are registered with the local bar association. Bar associations are extremely autonomous organizations that do not tolerate government intervention, but instead impose self-discipline.

Although the registration system of Certified Public Accountants (CPAs) is not as far-reaching in itself as that of the bar associations, I highly appreciate their efforts to steer it based on their own judgment and to reduce misconduct and other such incidents by establishing a code of ethics and other provisions.

While it is sad that auditors have to be audited, the CPAs created such a framework of their own accord, so we need to positively observe how it will be steered and managed in the future.

Q.

There are some news reports that non-payment of fringe claims might have occurred afresh at Mitsui Sumitomo Insurance. Has the current situation been identified regarding this matter?

A.

I have not been informed of this matter, but it is true that we have completed the stage of notifying the inspection results and issuing a reporting request.

(End)