Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Excerpt)

(Friday, November 13, 2015, 9:50 am to 10:18 am)

[Questions and answers]

Q.

I would like to ask about certified public accountants (CPA). Just a little while ago they began announcing the results of the CPA examination in the building next door, and the Toshiba accounting scandal has again thrown the spotlight on CPAs, so I would like to ask for your comments on what you expect of CPAs and what they should ideally be doing.

A.

As I have said before, tax accountants have taken on a more prominent role than CPAs in Japan. Many of the places where tax accountants are more prominent than CPAs are countries such as Germany and Japan that were defeated in World War II. CPAs tend to be more prominent in the victorious countries such as the UK and the US. What has been the result of this? If someone asks me for a loan to start a company or asks me to invest in his start-up company, I am handing over my money in both cases so it is essentially the same to me. The difference lies in whether I receive bonds or stocks for my money. They are the same in the sense that I had to hand over money for them. Despite this similarity, they differ in the fact that stocks provide a return in the form of dividends. That is why CPAs have thrived in. When a company borrows money, it can remain in the red as long as it pays out interest, so it is for that reason that tax accountants thrived in. Financial assets have undoubtedly increased, with private-sector assets now exceeding 1,700 trillion yen and a large portion of that in personal financial assets. Given that more than half of these assets are held in cash and deposits, people have at least gained the competence to convert assets from cash into financial assets such as stocks. In line with this trend, CPAs are demonstrating their value in Japan, and have taken on greater significance. I think we are moving into an era in which CPAs will be able to exercise their abilities to a somewhat greater extent. As an institution able to speak from the perspectives of shareholders and investors, CPAs are beginning to play an even bigger role than tax accountants. That is a good tendency.

(End)