March 27, 2007
Financial Services Agency
Government of Japan

The second Japan-EU Monitoring Meeting on Developments in Accounting and Auditing Issues''

The second Japan-EU Monitoring Meeting on Developments in Accounting and Auditing issues was held in Tokyo on March 23rd and 26th, 2007. Mr. Maruyama, Deputy Commissioner for International Affairs, and other representatives attended the meeting from the FSA.

The following is the Press Release announced after the closing of the meeting.

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Press Release

The Second Japan-EU Monitoring Meeting
on Developments in Accounting and Auditing Issues
March 26, 2007, Tokyo

The Second Japan-EU Monitoring Meeting on Developments in Accounting and Auditing Issues was held in Tokyo on March 23 and 26, 2007. The meeting was co-chaired by Mr. Junichi Maruyama, Deputy Commissioner for International Affairs of the Financial Services Agency (JFSA), and by Mr. Pierre Delsaux, Director, Directorate-F of DG Internal Market and Services of the European Commission (EC). A number of officials participated in the meeting from both sides.

The session on the 23 ^rd was devoted to auditing issues, including recent developments and possible cooperations. On the 26^th, discussions were focused on accounting standard issues, mainly in regards to the progress in the EU equivalence exercise and the convergence process.

In the session on auditing on the 23^rd,

• The EC explained its ongoing process of equivalence assessment on audit, including reactions to its consultation document issued in January;
• The JFSA emphasized the importance of maintaining the openness in the European market in proceeding with the equivalence assessment, and detailed the features of Japanese auditor oversight system.
• Both parties also discussed about other recent developments and possible cooperations in the area of auditor oversight, with a view to maintaining the openness in the both markets.

In the session on accounting issues on the 26^th,

• The EC explained its ongoing work on its report to be submitted by April to the European Parliament, regarding the work timetable for Japan and other countries towards convergence; and on the definition and mechanism of equivalence.
• The JFSA provided explanation as to the time-frame for convergence on the part of Accounting Standards Board of Japan, and underlined the steady progress therein in accordance with the programme.
• Discussions also covered topics such as consistency in the application of IFRSs.

The next meeting is scheduled for the second half of 2007.