公認会計士 依田康志事務所

The Company Code (Japanese law of corporations) requires to appoint a corporate auditor (article 327) if a board of directors is implemented.

In most of cases someone in head office or a regional office, like a head of internal control or a legal council is appointed as a corporate auditor.
Some companies have a policy that a finance personnel in head office or a regional office cannot be an auditor, due to the segregation duty.

A corporate auditor is to audit financial statements based on Japanese GAAP including income statement, balance sheet, business report and supplemental schedules.

Since it is not practical for an auditor to come to Japan for his/her field work, he/she just relies on an internal audit if applicable.
If not, he/she relies on an independent auditor who performs a consolidation audit.

As a licensed CPA in Japan, Yoda Accounting Office also performs such audit services. Please contact if needed.

In the other day I was helping to develop a business plan.

The original version the client prepared included the reimbursement to a bank as a cost. In the other hand a depreciation was not included.

As you may know the reimbursement to a bank is not a cost, while a depreciation should be included as a cost.
This concept is very much basic for accountants, but not for everyone.

However the point was that the client’s view was how much the cash balance remains on his hand.

It is also an accounting basic that a profit in accounting is different from a cash balance on hand. However “cash is king” for a management is very important to see how much the cash balance will be.
The client knows the cash flow management in a general sense.

An accountant may pay attention to an appropriate transaction in accounting, but the true engine running a company is cash generation.

We may always want to realize how much the cash will remain and what the source of cash generation is.

As discussed previously, most of domestic Japanese companies require more than two weeks to close monthly report due to the attention on accuracy rather than timeliness. The business insight is also merely discussed but just analysis of the actual figures is discussed.
These circumstances are generated from tax accounting requirement. Most of Japanese companies are very conscious about the tax requirement and the accounting books are mostly based on tax accounting policy.
Of course management reports with business insights are prepared, but by various operating divisions and not organized or integrated.
Finance dept. is expected to organize them but sometimes there are some discrepancies between the finance and other operating divisions.
Therefore an integration of management reporting is required under one-voice controlship.

Yoda Accounting Office is ready to assist you to establish your business in Japan or invest on Japanese companies. Please feel free to contact us through the form.

Finance department in Japanese companies are not always same as the ‘finance’ department in other countries.

Finance functions are almost same such as book keeping, collecting money from customers, paying money to suppliers and reporting to the management.

Most of Japanese (especially domestic) companies pay attention on accuracy and tax-oriented accounting. Monthly closing sometimes require more than two weeks, that is because such accounting method does not allow accruals for tax reasons.

Another difference is FP&A function. Most of Japanese companies’ finance consist of financial accounting and treasury, but not FP&A.

Such business analysis and planning function is provided by a corporate planning section, or planning section even in sales section or other operational sections.

It is important how to establish the relationship between finance and such corporate planning sections in terms of analysis in financial point of view.

Yoda Accounting Office is ready to assist you to establish your business in Japan or invest on Japanese companies. Please feel free to contact us through the form.