The Financial Services Agency of Japan (JFSA), the Certified Public Accountants and Auditing Oversight Board (CPAAOB) and the UK Financial Reporting Council (FRC) have signed an agreement to share information on audit related work.

The agreement provides for the mutual cooperation in the exchange of information regarding audit oversight, such as the outcome of inspections and investigations, and the transfer of audit working papers.

The cooperation between regulators affects firms in the UK or Japan that audit listed companies in one another’s regulated capital markets, such as London and Tokyo’s stock exchanges.

Each authority will share information upon request, assessed on a case-by-case basis, and in so far as the request abides to both the agreement and their respective laws.

"Given the global nature of capital markets, it is in the common interest of both parties to cooperate in the oversight of auditors to avoid the undue burden of overlapping supervision," the FRC said in a statement.

The agreement also provides for the disclosure of information to a third party by obtaining the prior consent of the other regulator.

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By GlobalData

If the disclosure of information is required by law, the regulator should consult its counterpart first. And if the requested party objects, it "will use its best efforts and provide assistance" to resist to the disclosure.

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Financial Services Agency of Japan