(Provisional Translation)
June 11, 2014
Financial Services Agency
Certified Public Accountants and Auditing Oversight Board

Exchange of Letters on cooperation in the area of audit oversight with the AFM of the Netherlands

1. The Financial Services Agency (FSA) and the Certified Public Accountants and Auditing Oversight Board (CPAAOB) exchanged the Letters on cooperation in the area of audit oversight (PDF:5,773KB) with the Netherlands Authority for Financial Markets (AFM) on June 11, 2014.
2. The contents of the Letters replace the letters exchanged by the authorities on March 26, 2013, which confirmed a framework to exchange information on the oversight of auditors. The authorities exchanged the Letters this time to further strengthen cooperation between the authorities by expressing their intentions to mutually rely on the oversight of foreign audit firms in their home countries.

(Reference 1) Based on “A Framework for Inspection / Supervision of Foreign Audit Firms, etc.” published on September 14, 2009, the FSA and the CPAAOB will, in principle, rely on the actions by the competent authorities of the firm’s home jurisdictions, instead of seeking to obtain information from or conducting inspections on firms themselves, provided that (a) audit and public oversight systems in the firm’s home jurisdictions are equivalent to those of Japan, (b) necessary information can be provided from the foreign competent authorities through appropriate arrangements of information exchange, and (c) reciprocity is ensured. See also Mutual Reliance with Foreign Jurisdictions in the Area of Audit Oversight.

(Reference 2) On July 11, 2013, the FSA and the CPAAOB published a decision that the audit and public oversight systems for auditors and audit firms of Kingdom of the Netherlands is equivalent to the corresponding systems in Japan. See also Equivalency Assessment on Audit and Public Oversight Systems of Foreign Jurisdictions.