Exposure draft to revise the auditing standards: the going concern assumption and the response to fraudA draft has been published to review the rules for the audit that checks a company's financial statements
On October 16, 2026 (Reiwa 8), the Audit Committee of the Business Accounting Council at the Financial Services Agency published "Revision of the Auditing Standards (Exposure Draft)." The review has two pillars: the auditor's response regarding the going concern assumption, which is the premise that a company will continue its business, and the auditing standards on fraud. A comparison table of the old and new provisions of the auditing standards (extract) was released together with the draft. Comments are due by 5:00 p.m. on Monday, November 16, 2026.
- October 16, 2026The exposure draft on revising the auditing standards is published
- October 16 to November 16, 2026Comments are invited (accepted by mail or through e-Gov)
- November 16, 2026, 5:00 p.m.Deadline for comments (must arrive by this time)
Key points
- Published on October 16, 2026 by the Audit Committee of the Business Accounting Council (企業会計審議会監査部会) at the Financial Services Agency
- One pillar is to require a more appropriate response by the auditor on the going concern assumption (継続企業の前提) and to enrich the related explanations and disclosure of information
- The other pillar is the auditing standards on fraud: checking consistency with international standards and examining whether the domestic standards are appropriate
- As background, the auditing standards on the going concern assumption have been revised internationally, expanding the procedures for examining management's assessment and amending the matters stated in the audit report
- Released at the same time were Appendix 1, "Revision of the Auditing Standards (Exposure Draft)," and Appendix 2, "Comparison Table of Old and New Provisions of the Auditing Standards (Extract)"
What to do in practice
- Use Appendix 1 (the exposure draft) and Appendix 2 (the comparison table of old and new provisions) to check the changes that affect your own company's audit
- If you have comments, submit them by 5:00 p.m. on November 16, 2026 (by mail or through e-Gov)
When experts from outside a company check whether the financial statements the company prepared are correct, that is called an audit. On October 16, 2026, a council of the national government published a draft to review the rules for how that checking is done. Two things are being reviewed: how to check whether the company is likely to be able to keep going, and how to respond to cheating. Comments are accepted until 5:00 p.m. on November 16.
- 1. Publish a draftThe exposure draft was published on October 16, 2026
- 2. Gather commentsComments are accepted until 5:00 p.m. on November 16, 2026
- 3. Decide the contentThe content is then examined in light of the comments received
Points
- The draft to review the rules was published on October 16, 2026
- Two things are being reviewed: checking whether the company is likely to be able to keep going, and the response to cheating
- Comments can be submitted until 5:00 p.m. on November 16, 2026
What the words mean
- Audit
- When experts from outside the company check whether its financial statements are correct
- Going concern assumption
- The view that this company will be able to keep running its business from now on
- Exposure draft
- A draft published before a rule is changed, so that opinions can be gathered widely
- Financial Services Agency (FSA): FSA: Publication of "Revision of the Auditing Standards (Exposure Draft)"
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.