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Ⅰ　シンポジュームの目的

　早稲田大学法研グローバル COE（企画 C-2：企業活動の変容と会計，開示，監査，および内部統制：以下「法研 GCOE」という）は，Inter-nationalSymposiumonAuditResearch

（ISAR）との共催事業として，2012年 6 月16日（土）の午後，早稲田大学国際会議場において，とりわけ公認会計士による財務諸表監査に関連するシンポジュームを開催した。ISAR は，1980年代に南カリフォルニア大学・会計学部のTheodoreJ.Mock 教授を中心に組織されたAuditJudgmentSymposium を母体とし，爾来今日まで活動を継続している，監査研究に関するシンポジュームの中でも最も歴史の長く，かつ，世界各国の監査研究者によって支持されてきたシンポジュームである。　法研 GCOE の企画 C-2が企業における会計・監査領域の研究活動を対象とすることから，ISAR と法研 GCOE との共同事業を計画し，企業社会における監査─とりわけ公認会計士による財務諸表監査─を対象としたプログラムを企画することとした。監査研究者が主体となって企画された監査の国際シンポジュームがわが国において開催されることは非常に稀で，おそらく今回の開催が初めてではないかと思われる。

Ⅱ　シンポジュームにおける共催事業の内容

　ISAR が開催したシンポジュームは2012年 6月15－17日の３日間であるが，このうち法研GCOE が ISAR との共催で行った事業（以下，

「共催シンポジューム」）は，2012年 6 月16日の午後（13：30－17：30）のプログラムである。このプログラムは，現在，欧米の会計プロフェッションにおいて盛んに議論され喫緊の課題である「職業的懐疑心」（professionalskepticism）を中心としつつも，わが国の会計プロフェッションについての状況を報告してもらいたいとの ISAR 関係者の要請を受ける形で企画された。全体のプログラムは，PlenarySessionII:AuditQualityandCorporateGovernanceSystemsとPlenarySessionIII:ProfessionalSkepticisminAuditing の２つに分けられている。　共催シンポジュームは，鳥羽至英商学部教授の開会挨拶のあと，法研 GCOE の拠点リーダーである上村達男法学部教授が共催シンポジュームの開催を歓迎する挨拶を行った。その後で，ISAR の創設者である Mock 教授（UniversityofCalifornia,Riverside）が ISAR のこれまでの活動について総括的な説明を行った。　共催プログラムの最初のセッション（PlenarySessionII）では，オリンパス会計不祥事や大王

監査の国際シンポジューム

早稲田大学法研グローバル COE・�����������������io��l Symposium o� Audi� R�s���ch

（�SAR）共催による監査の国際シンポジュームの報告

鳥羽至英*

* 早稲田大学商学学術院・商学部教授

78

製紙経営者不正を背景に，わが国の企業社会において高まっている会計監査不信を踏まえて，日本公認会計士協会会長山崎彰三氏が日本公認会計士協会が実施している公認会計士監査の質を高めるための活動について報告を行った。また，上記の不祥事に対する日本公認会計士協会としての対応について説明がなされた。また，Aronson 教授（LawSchool,CreightonUniver-教授（LawSchool,CreightonUniver-sity）は，コーポレート・ガバナンスにおける独立監査人の役割を念頭に，アメリカにおけるSarbanes-OxleyAct 以後の法的環境の動きと日本におけるオリンパス以後の会社法を含む展開について報告がなされた。両氏の発表内容の要旨は，本「シンポジューム報告」の後半に掲載されている。特に，監査役監査の廃止を示唆している点が興味深い。　休憩を挟んで開始されたセッション（PlenarySessionIII）においては，Kadous 教授（EmoryUniversity）が，統一テーマ「監査上の懐疑主義」（ProfessionalSkepticisminAuditing）に関連して，「疑うこと」と「批判的に考えること」とを対比しつつ，監査の失敗の原因は「職業的懐疑心の問題」ではなく，十分な証拠に基づいて批判的思考を展開しなかったことに起因する，という考え方を示した。鳥羽教授（早稲田大学）は，監査上の懐疑主義なる概念は，特定の監査状況のもとで，監査人が監査証拠の入手・評価にあたって働かせる「疑う姿勢」（theauditor’sdispositiontoraiseaquestion）の側面─職業的懐疑心の深度─だけではなく，監査人がかかる証拠活動に従事する前に行う立証命題のたて方（assertionframing）の側面─職業的懐疑心の幅─があることを指摘することにより，監査上の懐疑主義は「深度」と「幅」からなるハイブリッドな性格を有していることを主張した。木村公認会計士（Pricewater-houseCoopers,Aarata）は，職業的懐疑心の強化に結び付くプラス要因（監査のやり方）と，反対に監査人の職業的懐疑心にブレーキをかけてしまう要因（監査のやり方）に言及しつつ，監査実務家の立場からの紹介と考察がなされた。

Ⅲ　共催シンポジュームの参加者の状況

　共催シンポジュームは，早稲田大学国際会議場において午後１時半から５時半まで，途中休憩を挟みながら４時間にわたって行われた。共催シンポジュームへの参加者は総数128名であり，その内訳は外国からの ISAR 参加者64名，日本人 ISAR 登録者22名，日本人 ISAR 非登録者42名である。表１は国別の ISAR 登録参加者数を，表２は共催シンポジューム日本人参加者の所属（職業）別内訳を纏めたものである。

表１　国別の ISAR登録参加者数Country No.Japan 22USA 20

Australia 16Netherlands 5

Canada 4Singapore 4Belgium 2Finland 2France 2

UK 2HongKong 1

Korea 1Malaysia 1Norway 1Taiwan 1Thailand 1

NewZealand 1Total 86

表２�　共催シンポジュームの日本人参加者の�所属（職業）別内訳

所属 参加人数教授・大学院生（会計専攻・法学専攻） 28

公認会計士・弁護士 8企業関係者（監査役を含む） 18

報道関係（雑誌社含む） 3官庁関係 4その他 3Total 64

付記：上記64名のうち，ISAR への登録を行った方は22名である。

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Ⅳ　共催シンポジュームのプログラム

「法研グローバルCOE ・ISAR共催シンポジュームプログラム」SATURDAY JUNE 16

13:30 - 14:00

Symposium Welcome and ISAR Overview (Waseda Conference Hall)Yoshihide Toba (Waseda University),

Tatsuo Uemura (GCOE and Waseda University)Theodore J. Mock (Chair, ISAR Scientific Committee)

14:00 - 15:10

Plenary Session II: Audit Quality and Corporate Governance SystemsJICPA Activities regarding Audit Quality

Shozo Yamazaki (President of the JICPA)Audit Firms as Gatekeepers in Corporate Governance Systems: The U.S. after Sarbanes-Oxley and Japan after Olympus

Bruce E. Aronson (Creighton University)

15:10 - 15:40 Coffee Break

15:40 - 17:30

Plenary Session III: Professional Skepticism in AuditingRefocusing the Professional Skepticism Discussion: Doubt versus Critical Thinking

Kathryn Kadous (Emory University)Constructing a Conceptual Framework of Professional Skepticism in Auditing

Yoshihide Toba (Waseda University)Professional Skepticism - Challenges for the Independent Auditors in Japan

Koichiro Kimura (Chief Executive Officer, PricewaterhouseCoopers Aarata)Moderator: Robert Roussey (University of Southern California)

Ⅴ　共催シンポジュームの発表要旨

　プログラムは，PlenarysessionII と III にわけて行われた（「Ⅳ　共催シンポジュームのプログラム」）。各セッションの講演者の発表内容については，以下にその要約を掲載しておくので，ご一読いただきたい。

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Plenary Session II

JICPA Activities regarding Audit Quality

Shozo Yamazaki

Chairman and President of JICPA

We are facing dramatic changes in the audit environment. The recent financial crisis has increased

concerns about reliance of the audit system in the world. The recent proposals on regulations around

audit in Europe and the US may change some traditional concepts in auditing.

If you look at Japan, the recent corporate scandals of certain listed companies have caused serious

doubts as to the reliance of audits and the role of auditors. However, I also believe that this is a good op-

portunity to discuss and re-emphasize the importance of audit, as well as to improve its quality.

In this session, I will provide a brief overview of the audit quality program by the Japanese Institute

of Certified Public Accountants (JICPA) and insights from the outcomes in the last few years.

1. Audit Quality and JICPAThe JICPA is the sole organization for the CPA profession in Japan under the CPA Act. It is empow-

ered by law to direct and oversee all Japanese CPAs and audit firms in audit standard setting, quality

control review and discipline.

2. Public Company Audit Firms in JapanThe JICPA is composed of more than 23,000 members (and 8,000 associate members) and more

than 200 audit firms. There are about 3,600 public companies in Japan. Any firms which audit the public

company must register with the JICPA registration system for listed company audit firms.

3. Registration for Public Company Audit FirmsThe registration system was established under the following fundamental framework as part of

JICPA’s measures to enhance the quality control system of audit firms which perform audits of listed com-

panies by being incorporated into the quality control review system currently conducted by the JICPA.

(a) Enhancement of the self-regulatory function (maintenance of indirect regulation)

(b) Mandatory registration

(c) Public accountability

(d) Sanctions by public disclosure

(e) Cooperation with stock exchanges (i.e. stock exchanges require listed companies to be audited

by the registered firms.)

(f) Ensuring fairness and transparency in administration of the registration system

I will introduce the outline of the Registration system, including the types of sanctions prescribed

in the JICPA Constitution.

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4. Quality Control Review ProgramUnder the CPA Act, as amended in 2003, the JICPA has the legal authority to conduct quality con-

trol reviews. Since 1999, quality control reviews have been carried out as a self-regulatory activity of the

JICPA. The amended CPA Act also requires the establishment of a public oversight body, the CPAAOB, to

ensure a fair, neutral and effective auditor oversight system in Japan.

I will illustrate our quality control review program and its outcomes in the last few years, with

relevant data.

5. Responses to Accounting ScandalsThe corporate scandals in 2011 are being investigated by several organizations including JICPA

Audit Practice and Review Committee. However, it may take time to establish a clear picture of the cor-

porate scandal. We responded, on a timely basis, by the immediate internal investigation and issuance of

several press releases. In addition, the JICPA has also established the Special Committee on the Improve-

ment of the Auditing System, in order to consider the current practice of auditing, and what should be the

appropriate corporate governance. The Special Committee, which includes also highly experienced indi-

viduals from outside the profession, will function as an advisory body to the Chairman and President. In

order to promote even greater trust in capital markets, the Committee will perform an extensive review

of the overall system of audit and corporate governance in Japan. I will now provide the matters for con-

sideration by the Committee to date.

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Audit Firms as Gatekeepers in Corporate Governance Systems: The U.S. after Sarbanes-Oxley and Japan after Olympus–Summary

Bruce E. Aronson

Professor of Law at the School of Law at Creighton University

The role of audit firms as ‘gatekeepers’ in corporate governance has received great attention over

the past decade. The term gatekeeper became popular following financial reporting scandals at Enron,

Worldcom and other large corporations. These cases raised the issues of auditor independence and the

accuracy of financial reporting at a time when large accounting firms seemed to be focusing on providing

consulting services to large corporations that were also audit clients.

The Sarbanes-Oxley Act (SOX) was enacted in 2002 to deal with these issues and ensure the ac-

curacy of financial reporting that is essential for securities markets. It adopted a number of measures that

directly affect audit firms: a re-emphasis on auditing work over consulting work, a new emphasis on audit-

ing of internal controls, changing control of the auditing relationship from corporate management to the

board’s audit committee, requiring immediate disclosure of any change of auditing firms, and new regula-

tion of the accounting profession.

How has this increased demand for audit firms to play a larger gatekeeper role altered sudit firms’

operating environment? SOX succeeded in shifting accounting firms’ emphasis back to audit work, but at

a cost. The biggest impact on accounting firms was a loss of professional independence, as self-regulation

was substantially replaced by governmental regulation under the PCAOB. The PCAOB, an independent

agency under the SEC, registers audit firms, sets auditing standards, and also engages in inspections and

enforcement with regard to audit firms and accountants.

Following SOX, over 40 countries have similarly set up some regime for governmental regulation

of auditors, including Japan. Although many of the issues that resulted in the passage of SOX have been

addressed, new issues such as globalization of the audit business and valuation methods for new financial

instruments have also arisen.

In addition to new regulation, audit firms are also concerned with litigation risk, especially with

respect to securities class actions. Efforts by Congress, the Supreme Court and others to limit securities’

class actions have gradually had some effect. However, the last decade has seen a volatile stock market

and investor losses that are conducive to such litigation. Overall, the situation may have stabilized after

the immediate post-SOX period as audit firms have gradually adjusted to new legal requirements and to

new heightened expectations of their role. However, there is also new litigation following the 2008 finan-

cial crisis, as exemplified by the Lehman Brothers bankruptcy case, in which trustees in bankruptcy or

receivers of financial institutions file lawsuits against audit firms.

In Japan the Olympus case has focused new attention on corporate governance issues and particu-

larly on the roles of both audit firms and internal company auditors (kansayaku). In this case, losses of

U.S.$1.5 billion were concealed over 20 years, with the company twice utilizing complex schemes to avoid

new accounting standards and filing securities reports with inaccurate financial statements for a number

of years. The recommendation of a third party committee established by Olympus was that there be no

83

liability for the audit firm, but liability for the internal company auditors.

The role of internal company auditors, or kansayaku, in Japanese corporate governance is often

confusing to outsiders. Although their role began as internal accounting auditors, it gradually expanded

to include monitoring all business operations of the board and the company. Some critics claim that kan-

sayaku do not have sufficient authority to undertake this broad role since they attend, but do not vote at

board meetings and because they have no authority to hire and fire directors or officers. Others, who think

they do have adequate power, point to their clear legal authority to investigate and obtain information and

their right to obtain injunctive relief against the company for any proposed illegal action.

Japanese corporations have the option to replace the traditional Japanese system using internal

company auditors with an “American-style” system that instead utilized three board committees of main-

ly outside directors to monitor management. However, very few Japanese companies have adopted this

alternative “board with committees” system.

Since 2003 Japan also has a system of governmental regulation of audit firms. The CPAAOB, an

independent body within the Financial Services Agency supervises quality control reviews conducted by

the accounting industry group (JICPA) and also directly inspects the Big Four accounting firms. The JI-

CPA is in charge of inspection of all other accounting firms. The US PCAOB conducts join inspections of

Japanese accounting firms that audit US-listed companies.

In Japan there is no securities class action system, and no lawsuits against audit firms. However, as

a result of a financial reporting scandal in the Kanebo case (2005) one of the major audit firms, Chuo

Aoyama, was forced to cease operations much like Arthur Anderson in the U.S. following the Enron scan-

dal.

There are a number of proposed reforms following the Olympus case. Possible amendments to the

Company Law include the introduction of a new, optional “one committee” form of governance in which

the kansayaku would also disappear to be replaced by a single board committee. The Financial Services

Agency is studying methods to strengthen the function of audit firms, which presumably could include

regulatory changes at the CPAAOB.

In addition, a new scandal arose at AIJ in February 2012. Like the Bernie Madoff case in the US, it

involves an asset management firm stealing large sums of investor funds under a ponzi scheme while

claiming consistently high, steady returns on investment. Like Dodd-Frank in the U.S., this eventually

could have an impact on auditing of asset managers and other financial institutions. In both the U.S. and

Japan audit firms face demands to play a stronger gatekeeper role to help ensure accurate financial re-

porting, and they are gradually responding to such demands. In the US regulation and enforcement are

now strong, but there is a question of whether they are worth the cost. In Japan new demands to strength-

en regulation and enforcement are emerging. All this occurs in a time of increasing globalization and more

complicated business structures and financial assets that add to the challenge facing audit firms today.

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Plenary Session III

Refocusing the Professional Skepticism Discussion: Doubt versus Critical Thinking

Kathryn Kadous1

Professor at the Goizueta Business School at Emory University,

The PCAOB’s inspection program has provided insight into the specific types of decision problems

that auditors experience in doing their jobs. In our research into audits of accounting estimates, my coau-

thors and I have studied PCAOB inspection reports and have interviewed auditors to learn more about

decision problems that threaten audit quality for this important task. We find that auditors overwhelm-

ingly choose to audit management’s model, rather than generating an independent estimate, and that they

make a number of specific errors (e.g., failing to appropriately evaluate the reasonableness of assump-

tions underlying the model) that result in overreliance on management and underreliance on external

evidence (Griffith et al. 2012).

The sorts of decision problems we identify are commonly attributed to a lack of professional skep-

ticism. Professional skepticism is defined in the academic accounting literature as a propensity to defer

reaching a conclusion until sufficient evidence is accumulated in favor or one conclusion or another (e.g.,

Hurtt 2010) or as a propensity to view the risk of misstatement as heightened (Nelson 2009). While these

views of skepticism vary in terms of their starting position (i.e., neutral belief versus presumptive doubt),

they both view a skeptical auditor as one who needs more evidence to be convinced that management’s

estimates are accurate– that is, they focus on doubt. Similarly, practitioners seem to view skepticism as

centering on doubt, and they also view increased professional skepticism as essential to improving deci-

sion quality.

My view is somewhat different. While I believe that increased skepticism could improve audit qual-

ity, I don’t see it as a major cause of these decision problems. In fact, I view lack of skepticism as not so

much a cause of auditors’ judgment problems as a symptom of them. My collaborators and I argue that the

underlying causes of these poor decision behaviors are that the auditor tends to approach the task of

auditing with a mindset that does not facilitate critical thinking and therefore, does not facilitate high

audit quality, and that auditors sometimes lack critical knowledge and abilities to perform high quality

audits. In other words, we believe that focus on critical decision processes, as well as identifying critical

abilities and knowledge types is more likely to be production in improving audit quality than is increasing

doubt. This is consistent with evidence demonstrating that increasing auditor doubt may increase the

amount of planned audit work without increasing audit quality (Hammersley 2011, Hammersley et al.

2011), while higher audit quality is associated with whether the auditor identifies specific problem (Ham-

mersley et al. 2011), and is improved by interventions designed to increase auditor critical thinking (Hoff-

1 This talk is based, in part, on research done with coauthors, especially Jackie Hammersley and Emily Griffith.

85

man and Zimbelman 2009, Brewster 2011).

In particular, it appears over-reliance on management arises because the auditor typically ap-

proaches the audit of estimates in a mindset that encourages efficient completion of a verification task

rather than one that encourages critical thinking and consideration of a broad set of evidence. We propose

that auditors with certain types of cognitive styles are more likely to find themselves in the type of mind-

set that facilitates critical thinking and, thus, high audit quality. We further propose that auditors with

particular abilities and knowledge will be better able to take advantage of being in the right mindset.

These ideas are summarized in our model in Figure 1.

We are currently conducting empirical tests of our model. So far we’ve conduced three pilot stud-

ies and we are collecting data from practicing auditors in June. Our results strongly support the idea that

individual differences in cognitive style (need for closure, need for cognition), as well as ability measures

(IQ, cognitive reflection, numeracy) determine whether individuals identify discrepancies between man-

agement’s assertions and reality, and thus, their overall conclusions about how reasonable management’s

assertions are. This implies that some individuals may make better auditors than others, and that we can

identify them ex ante. We have also identified a nudge that helps individuals to leverage their abilities to

identify discrepancies. We have had less luck so far with nudges designed to specifically change auditors’

mindsets, but we keep trying.

Figure 1 Framework for Improved Audit Quality

86

Figure 2 Pilot Results from Tests of the Framework

References

Brewster, B. E. 2011. How a systems perspective improves knowledge acquisition and performance in

analytical procedures. The Accounting Review 86 (3): 915-943.

Griffith, E. E., J. S. Hammersley, and K. Kadous. 2012. Auditing complex estimates: Understanding the

process used and problems encountered. Working paper.

Hammersley, J. S. 2011. A review and model of auditor judgments in fraud-related planning tasks. Audit-

ing: A Journal of Practice & Theory 30 (4): 101-128.

Hammersley, J. S., K. Johnstone, and K. Kadous. 2011. How do audit seniors respond to increased fraud

risk? Auditing: A Journal of Practice & Theory 30 (3): 81-101.

Hoffman, V. B. and M. F. Zimbelman. 2009. Do strategic reasoning and brainstorming help auditors change

their standard audit procedures in response to fraud risk? The Accounting Review 84 (3): 811-837.

Hurtt, R. K. 2010. Development of a scale to measure professional skepticism. Auditing: A Journal of

Practice & Theory 29 (1): 149-171.

Nelson, M. W. 2009. A Model and Literature Review of Skepticism in Auditing. Auditing: A Journal of

Practice & Theory 28(2): 1-34.

87

Constructing a Conceptual Framework of Professional Skepticism in Auditing

Yoshihide Toba

Professor at the Graduate School of Commerce at Waseda University

There has been an increasing number of arguments on a national and an international level, both

academically and practically, on “professional skepticism in auditing.” The internal and external environ-

ments surrounding independent auditors have resulted in an eroding of professional skepticism and have

threatened to weaken society’s trust in auditors. Professional standards have long emphasized an appro-

priate degree of skepticism throughout the evidence process, which is composed of planning audit pro-

grams, performing audit procedures, and evaluating the audit evidence. Auditors are expected to under-

stand that the essence of skepticism is “raising a question” and “exhibiting a questioning mind,” yet this

is not enough to prevent audit failures resulting from insufficient skepticism.

1. The hybrid concept of professional skepticismOne of the basic issues facing the accounting profession in the US and Europe at the moment is

professional skepticism in auditing. This issue is fundamentally a matter of audit evidence and is, firstly,

concerned with how the auditor should doubt the financial statements of the company under audit and,

secondly, concerned with the degree and extent to which an auditor should doubt them. To put it another

way, professional skepticism contains the following two facets: the breadth and the depth of the auditor’s

cognition.

The breadth of professional skepticism in auditing

This facet is concerned with the auditor’s assertion-framing which includes determining the basic

nature (affirmative and negative) of assertions to be scrutinized. It is basically related to “an auditor’s way

of knowing” and symbolically deals with what approach (positive or negative) the auditor should (can)

adopt prior to initiating the evidence process. Thus, professional skepticism in auditing is epistemic in

nature. In general, the more assertions, positive and/or negative, the auditor scrutinizes, the more broad-

ly the auditor’s skepticism will be applied and exercised.

The depth of professional skepticism in auditing

This facet is concerned with making an evaluative judgment concerning the relevance, quality

(reliability), and quantity of audit evidence to be collected for scrutinizing a particular assertion. This

facet is related to the auditor’s disposition to raise a question in making such an evidential judgment in a

particular audit setting and fundamentally deals with measuring the depth of the auditor’s questioning

mind. In this sense, professional skepticism in auditing is psychological in nature. In general, the more

evidence and the more competent evidence there is to use, the more deeply the auditor’s skepticism re-

lated to the assertion will be exercised.

In other words, professional skepticism in auditing is a hybrid concept constituting the epistemic

and psychological facets of audit cognition. Whether the auditor can successfully accomplish his/her as-

88

surance role under a financial statement audit depends on his/her success in exercising professional

skepticism of a hybrid nature (Figure 1).

Figure 1 The Hybrid Nature of Skepticism in Auditing

2

positive and/or negative, the auditor scrutinizes, the more broadly the auditor’s skepticism will be applied and exercised.

The depth of professional skepticism in auditing This facet is concerned with making an evaluative judgment concerning the

relevance, quality (reliability), and quantity of audit evidence to be collected for scrutinizing a particular assertion. This facet is related to the auditor’s disposition to raise a question in making such an evidential judgment in a particular audit setting and fundamentally deals with measuring the depth of the auditor’s questioning mind. In this sense, professional skepticism in auditing is psychological in nature. In general, the more evidence and the more competent evidence there is to use, the more deeply the auditor’s skepticism related to the assertion will be exercised.

In other words, professional skepticism in auditing is a hybrid concept constituting the epistemic and psychological facets of audit cognition. Whether the auditor can successfully accomplish his/her assurance role under a financial statement audit depends on his/her success in exercising professional skepticism of a hybrid nature (Figure 1).

Figure1 The Hybrid Nature of Skepticism in Auditing

Skepticism in Auditing

a questioning mind

a framework ofaudit cognition

Psychology

Philosophy/Linguistics

2. Previous research on professional skepticismResearch on professional skepticism has been in progress for some time, yet almost all prior (em-

pirical) research on the subject has focused entirely on the second facet, particularly on the effects of the

auditor’s psychological traits on his/her professional skepticism. Why? These studies seem to have been

based on a preconception that only an affirmative approach (“substantiating the assertions”: confirma-

tion) can be accepted as the “way of knowing” under a financial statement audit.

It should be noted, however, that another way of knowing is recognized in the philosophy of sci-

ence, that is, a negative approach (“proactively looking for negative indications of material misstatements:

falsification). Under a negative approach, the auditor needs to scrutinize negative assertions so that he/

she can form a reasonable basis for corroborating his/her belief in the fair presentation of financial state-

ments.

3. Objective of the presentationThe main objective of the presentation is to present a conceptual framework of professional skep-

ticism (Figure 2) which gives due consideration to its hybrid nature as well as different views of the audi-

tor’s mind-set on skepticism recognized in the auditing literature. This conceptual framework can show,

in terms of professional skepticism, not only where the current audit practice is considered to stand, but

also in which direction the practice is (may be) shifting.

Starting a fresh mind-set on professional skepticism implies the need for us to focus academic ef-

forts on negative assertions in auditing. Expanding the attention of the auditor to encompass not only

positive assertions, but also negative assertions would strengthen the auditor’s professional skepticism

and lead to improving the overall quality of a financial statement audit. In conclusion, major reserch is-

sues, as might be expected in relation to negative assertions, will be presented.

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Figure 2 A Conceptual Framework of Skepticism in Auditing

3

2. Previous research on professional skepticism

Research on professional skepticism has been in progress for some time, yet almost all prior (empirical) research on the subject has focused entirely on the second facet, particularly on the effects of the auditor’s psychological traits on his/her professional skepticism. Why? These studies seem to have been based on a preconception that only an affirmative approach (“substantiating the assertions”: confirmation) can be accepted as the “way of knowing” under a financial statement audit. It should be noted, however, that another way of knowing is recognized in the philosophy of science, that is, a negative approach (“proactively looking for negative indications of material misstatements: falsification). Under a negative approach, the auditor needs to scrutinize negative assertions so that he/she can form a reasonable basis for corroborating his/her belief in the fair presentation of financial statements. 3. Objective of the presentation

The main objective of the presentation is to present a conceptual framework of professional skepticism (Figure 2) which gives due consideration to its hybrid nature as well as different views of the auditor’s mind-set on skepticism recognized in the auditing literature. This conceptual framework can show, in terms of professional skepticism, not only where the current audit practice is considered to stand, but also in which direction the practice is (may be) shifting.

Figure2 A Conceptual Framework of Skepticism in Auditing

Breadth

Ways of knowing

Positive approach (substantiation)

Negative approach (falsification)

Depth A

questioning mind

Neutrality I

II

Presumptive doubt

Ⅲ

IV

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Professional Skepticism – Challenges for Independent Auditors in Japan -

Koichiro Kimura

Chief Executive Officer of PricewaterhouseCoopers Aarata

Challenge #1 – Develop curiosity and willingness of auditorsNew joiners to the audit profession in Japan are typically those who just passed the examination

(of less than 10% success rate) with full of compliance mindset. How would you coach and develop them

to be fully curious and willing to pursue issues to resolution with healthy professional skepticism?

One way is to motivate them through recognition and appraisal. Although we need to face some

cultural challenges such as a mentality that development of a professional has to be always strict, this is

an easier part of the development. Suggested change in approach by the Japanese CPAAOB to place more

focus on best practices at large firms is encouraging as well.

Another aspect is to embed the passion to pursue value for audit clients. This may sound contra-

dictory to the professional skepticism. However, our experience indicates that there are certain correla-

tion between audit quality and the results of client satisfaction survey. Very strong feedback in many

cases correlates to high quality audits. Poor results do not necessarily lead to poor quality, but indicate

that there are mis-communications between auditors and clients. The real issue resides in the average

zone — constant feedback of not-good, not-bad rating suggests poor interaction between auditors and

clients due to lack of curiosity and willingness to pursue value.

What are the things that audit clients suggest they don’t like? The number one is always the ex-

pensive fees. They feel the fees are expensive, because auditors are not valuable to them. What they don’t

see value in audits are boilerplate questions, shallow thinking or performance of excessive procedures

without convincing explanation. This is where I motivate audit teams to exercise professional skepticism

so that they can pose smarter questions and become a bit more valuable.

What clients do see value are the insights such as those on risk management, effective control or

fraud detection. In order to develop the capability to deliver these insights, we need to train our staff on

deep thinking about the core value of clients and businesses. We annually issue value report to clients so

that we can get mutual understanding about what the values are for the clients.

Fictitious circular transactions are the focus area for Japanese auditors over many years. If you

constantly think about value creation of the clients, you may be able to better detect the lack of substance

of those transactions.

Challenge #2 – Corporate governanceStrong corporate governance can strengthen the effectiveness of independent auditors’ skepti-

cism. When auditors can have competent dialog with the clients’ governance bodies, the questioning mind

and critical assessment will really work. If audit clients do not take up difficult questions from auditors,

the skepticism will not achieve the objectives.

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One obstacle for auditors to pose difficult questions is the fear to challenge or change the things

that were once agreed in the past. Auditors have to be confident about the relationship with clients and

their governance bodies. The better you know a client, the more effectively you can exercise your profes-

sional skepticism.

Challenge #3 – Going to extremeAs there is no clear measure for the degree of professional skepticism, auditors tend to go to ex-

treme when they get negative feedback at an inspection by regulators. One example is the balance be-

tween analytical procedures and detailed substantive testing. When a regulator pointed out insufficient

granularity of performance of analytical procedures, the inspected auditors determined it would be more

practical to perform detailed substantive testing rather than the analytical procedures. Once the inspect-

ed engagement team does this, it becomes the norm and other teams tend to automatically start testing

thousands of samples. This clearly deprives auditors of motivation to think through the risks to assess

them with healthy professional skepticism.

One good solution to avoid auditors going to extreme is the review panel at Japanese auditing

firms, which tend to place more reliance on this than on quality review partners. The panel is consisted of

several experienced client service partners and acts as the final gate keeper of the firms’ quality manage-

ment. The panel typically meets every week and go through contentious audit issues with engagement

partners. The panel members share their experience of tough discussion with their clients and try to

make sure that consistent judgment is made to the firm’s clients. The judgment becomes relatively con-

servative, as the panel never allows engagement teams to exceptionally reach to easy conclusion. Engage-

ment partners can have stronger comfort on their professional skepticism and judgment.

Challenge #4 – DiversityIf you are a member of global network firm, you will be exposed to different views from various

territories. Quality management cannot be an exception and heated debates are held from time to time

about the degree of taking those different views into consideration. One recent example was how much

we should test pension assets. For testing the existence and valuation assertions of pension assets, audi-

tors in Japan typically obtain direct confirmation from custodians on the overall fair value of assets. Upon

an incident of fictitious reporting by an investment advisor in Japan, the view that pension assets should

be tested by obtaining the detailed listing of composites and examining the valuation of sample assets was

suggested. Auditors first tried to argue that local practice does not require or even allow performance of

such procedures, with no reference about how much skepticism should come into this situation. When the

push from the overseas firms won the argument, the degree of professional skepticism was more aligned

to the global standards. Diversity worked out quite well to practically define the degree of professional

skepticism.

Another area that Japanese auditors can sharpen up the exercise of professional skepticism is the

use of specialists. When a company makes a big acquisition, for example, purchase price allocation will

become a big focus area of audit. You have to bring in the specialists on valuation and you may want to add

economists in particular industry as well. These specialists will bring about expertise of not just valuation

techniques, but also the perspectives about economic substance of the business. These expertise will be

a great luxury for the foundation of exercising the healthy professional skepticism. Auditors tend to think

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they know everything about the company and the business and auditors also wish to control everything

in the audits; however, by excluding different views, they are reducing the effectiveness of skepticism. In

order to achieve this, audit firms have to have a wide line-up of competent specialists.

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報告後記

　2009年に Singapore において開催された In-ternationalSymposiumonAuditResearch の運営委員会（ScientificCommittee）において，2012年に早稲田大学での ISAR 開催をお引き受するとの意向を表明してから，およそ３年間にわたる準備を経ての開催であった。外国研究者を中心とした本格的な国際シンポジュームが会計・監査の分野で開催されたことはこれまであまり耳にしたことがなく，おそらく初めての経験ではなかったかと思われる。さらに，シンポジュームの運営（宿泊・会場・外部資金の調達・登録料管理・各種支払い・マンパワー等）のための計画・準備はシンポジューム主催大学

（監査研究者）において行わなければならず，その意味でも大事業となった。　傾向として続く円高と東日本大震災（および放射線問題）が重なったため，シンポジューム企画・運営責任者としては，登録者数と発表のための論文投稿数の減少が心配であったが，登録者数は例年と変わらず，嬉しいことに論文投稿者数においては過去最多であった。また，ISARが他の組織と共催でシンポジュームを開催することは今回が始めてであった。開催２日目午後はすべて共催プログラムに当てられるため，ISAR単独プログラムの発表者数を多少制限せざるを得なかったが，共催プログラムも ISAR 単独プログラムも成功裏に終了することができた。　われわれが今回のシンポジュームを通じて学んだことは，①　国際シンポジュームの開催がけっして容易

ではないこと，しかし，この経験を積み重ねていくことによって，わが国の監査研究者は国際的な会議の運営や参加（発表）に慣れる必要があること

②　国際シンポジュームの開催を引き受けることによって，初めてわれわれ日本の研究者が外国研究者のネットワークへの仲間入りができた，との実感を得ることができること

③　外国の若手研究者が取り上げる研究テーマや研究方法論，とりわけ彼らの発表のやり方

（姿勢）を，日本の若手研究者が直接体験し，英語を使っての研究発表に向けて新たな刺激を得ることができること

である。　今回のシンポジューム開催に関連してわれわれが直面した問題は，この種の国際シンポジュームの開催費用を参加者の登録料だけで賄うことはできない，という現実であった。そのため，大学組織（会計研究所）からの支援，大学関係の自治組織（公認会計士稲門会），および外部団体（日本を代表する大手・中堅の監査法人計10法人）に，資金助成をお願いすることとなった。また，この過程で，われわれの台所を心配された個人（公認会計士：匿名）よりの寄付があったことも報告しておかなければならない。いろいろな意味で，「早稲田大学の大きさ」を感ずることとなった。なお，法研グローバルCOE 関係の事業支出─外国研究者の招聘・宿泊，内外の発表者への謝礼，配布資料，同時通訳関係費用，運営に関する雑費等─については，早稲田大学法研グローバル COE よりの支援を受けた。ここに，今回のシンポジュームの企画・運営責任者として，法研グローバルCOE の拠点リーダである上村達男教授に対して心からのお礼を申し上げる次第である。　今回のシンポジュームの運営に際しては，さまざまな方からの献身的な，心温まるご支援・ご協力をいただいた。プログラム全体の企画・運営について正にパートナーとして働いていただいた福川裕徳氏（一橋大学教授），開催２日目の夜の晩餐会の運営を担当していただいた永見尊氏（慶應義塾大学教授）・小澤康裕氏（立教大学准教授），プログラムの執行全体を裏方として支えていただいた亀岡恵理子さん（商学研究科博士課程１年），および大学院・学部ゼミの学生諸君に対してお礼を申し上げたい。また，共催プログラムの実施については，法研グローバル COE 業務に従事されている事務局の皆さんに感謝とお礼を申しあげる次第である。