Regulatory Alerts2023-03-24
Principles for Effective Management of Audit Firms (The Audit Firm Governance Code)
The Council of Experts on the Audit Firm Governance Code issued a revised version of the Audit Firm Governance Code to align with new statutory requirements for audit firms auditing listed companies. The Code establishes five principles requiring firms to exercise leadership, clarify management roles, enhance independent supervision, foster internal dialogue and personnel development, and disclose management initiatives. It mandates a 'comply or explain' framework where firms must justify deviations based on their size and characteristics, with the JICPA expected to supervise implementation.
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