Financial Administration in Japan and the Audit by Certified Public Accountants

Research Project

Project/Area Number	13630165
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Single-year Grants
Section	一般
Research Field	Accounting
Research Institution	CHUO UNIVERSITY (2003) Okayama University (2001-2002)
Principal Investigator	KOJIMA Takashi Chuo University, Faculty of Commerce, Professor, 商学部, 教授 (60304292)
Project Period (FY)	2001 – 2003
Project Status	Completed (Fiscal Year 2003)
Budget Amount *help	¥2,500,000 (Direct Cost: ¥2,500,000) Fiscal Year 2003: ¥800,000 (Direct Cost: ¥800,000) Fiscal Year 2002: ¥900,000 (Direct Cost: ¥900,000) Fiscal Year 2001: ¥800,000 (Direct Cost: ¥800,000)
Keywords	financial institution / chargeoff of loans / ALLL / banking regulatory agency / SEC / AICPA / FASB statement / 銀行会計 / 銀行の監査 / 不良債権償却証明制度 / 自己査定 / 金融検査マニュアル
Research Abstract	Japanese banks had provided allowance for loan and lease losses (ALLL) under the permission of the Ministry of Finance until the fiscal year ended at March 31, 1998. However, the change of the rules and regulations in 1998 lead Japanese banks to provide ALLL based on their own analysis of loan portfolio and estimation of loan losses. Based on the considerations of the structure of accounting standards for ALLL from 1998 to, 2002, we reached the conclusion that the accounting standards were not sufficient for banks to make a reasonable estimation of ALLL.. We considered the statements 'of the U.S. banking regulatory agencies on ALLL from 1986 to 2003 by compairing the statements with the view of the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (ALCPA), as well as the Financial Accounting Standards Board (FASB) 's standards and its view. The banking regulatory agencies has been 'issuing the statements jointly since 1993. Altough SEC joined the issuer of the statements from 1998, we found that there was a diagreement between banking regulatory agencies and SEC regarding the accounting for ALLL.. We also noted that there was a disagreement between banking regulatory agencies and AICPA as to the accounting for ALLL.. Further research on the current accounting standards for ALLL in Japan is neccesary in light of consideration of the statements of the U.S: banking regulatory agencies, SEC's view and AICPA's view.