In the United States, there is no requirement for non-public companies to have their financial results audited. However, there are some cases where audits are required for Japanese subsidiaries, such as when their parent company is listed on a U.S. stock exchange.

U.S. listed companies are required to submit 10-Q reports within 45 days of the end of each quarter and 10-K reports within 60 days of the end of each fiscal year to the Securities and Exchange Commission (SEC). Therefore, they have to work hard to compete with disclosure requirements within a short period of time. And then, when Japanese subsidiaries report their financial results to their parent company, it is required to perform so quickly based on US-GAAP.

In such cases, the audit of the subsidiary also becomes quite demanding. Component auditors have to  complete the procedures within one to two weeks after the closing date, and quarterly reviews are also required. Even reasonably-sized Japanese subsidiaries are required to undergo procedures quarterly.

In the past, audits of U.S. subsidiaries of Japanese companies were generally conducted by the same group firm as the parent company’s auditors. However, middle-sized accounting firms like ours have been performing component audits recently for small or medium sized Japanese entities. This is because there are fewer resources available from Big4 audit firms to handle these audits. Therefore, while we handle such audit for relatively small corporations, special procedures are not required quarterly, and most cases only require procedures to be performed in accordance with the parent company’s auditor’s instructions on an annual basis. Of course, there are no obstacles to conducting US-GAAP based work since USCPA holders handle these audits.

These audits do not necessarily have to be conducted by Big4 firms. Our company, which employs accountants who are familiar with US-GAAP, can handle them at a reasonable cost.

Our Advantageous Points

In the course of our audit, procedures will be performed by CPAs with extensive experience in US-GAAP. We also offer proactive advice and services to help clients prepare reliable US-GAAP figures beyond the scope of a normal audit. Although our services are only available in English, we strive to match the level of service provided by Big 4 audit firms. Unlike larger firms, we implement audit procedures with a minimal number of staff members, which allows us to offer reasonable fees to clients.

If you are frustrated by the high audit fees charged by other firms for your subsidiary, please don’t hesitate to contact us for more information about our services.

● Please click here for detailed information regarding service fees.