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Deceit revealed in Japanese companies

Deceit revealed in Japanese companies

by Rick Turoczy on December 21, 2004

An investigation by Japan’s Financial Services Agency has found that one in 10 listed Japanese companies deceived investors in financial statements, undermining the credibility of Japan’s stock market and denting the country’s reputation as an international financial centre.

In response to the crisis, the FSA is considering new governance rules, based on the US Sarbanes-Oxley Act, which would force listed companies to spell out how they guard against wrongdoing. The rules could give Japan one of the toughest compliance regimes in the industrialised world but are likely to be resisted by companies because they would increase operating costs.

The FSA has suggested that executives be forced to document internal management controls, which could push many companies into updating or implementing compliance systems for the first time in years.

Deceit revealed in Japanese companies

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