Serving society

Nicky Burridge
Benjamin Parks

The world is facing many pressing challenges, including climate change, and accountants will play a valuable role in managing them and developing solutions, says Masahiko Tezuka, Chairman and President of the Japanese Institute of Certified Public Accountants. He tells Nicky Burridge about his own challenge of supporting CPAs in Japan as they meet evolving expectations, and focus areas for his organization

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Nicky Burridge
Benjamin Parks


Masahiko Tezuka, Chairman and President of the Japanese Institute of Certified Public Accountants (JICPA), believes CPAs should serve society. Creating the right conditions for them to do so is a key part of his vision for JICPA, a member of the Global Accounting Alliance (GAA), an alliance of leading professional accounting bodies of which the Hong Kong Institute of CPAs is also a member. “When I assumed the position of Chairman and President in 2019, I set out a vision for ‘A professional organization, trusted by both its members and society, that makes the greatest possible contribution to sound economic development and the realization of greater well-being throughout society,’” Tezuka says.

To achieve this vision, he has set five strategic targets for JICPA to meet. The first two are to build confidence in CPAs, and build up relationships with stakeholders, including promoting constructive dialogue with them. The third target is to secure and develop talented human resources, while the fourth is to meet society’s needs, and the final one is to enhance the productivity and transparency of JICPA’s operations.

JICPA is Japan’s only self-regulatory body of CPAs and more than 33,000 CPAs in the country are required to register with it by law. “We uphold the professionalism of our member CPAs and audit firms, as well as guide, connect, and supervise them,” Tezuka says.

Its main functions are to establish ethical and auditing standards, provide training and continuing professional development, and conduct quality control reviews on audit firms. In performing these functions, it liaises with a wide range of stakeholders, including individual CPAs and firms, as well as regulators in Japan such as the Financial Services Agency, and the Certified Public Accountants and Auditing Oversight Board, and the preparers and users of financial statements, academics, and other groups of experts.

International collaboration

Tezuka considers a key part of his role at JICPA to be strengthening relationships with other GAA members and exchanging information on current issues and how to address them. “In circumstances where the environment surrounding the industry is changing internationally, the relationship with the GAA has become increasingly important for JICPA to look into the future of the industry from a global perspective and take adequate and timely actions,” he says.

He points out that the GAA plays an important role in examining what is currently happening in the industry in different countries, what matters are likely to affect the future, and what actions accounting professionals should take to manage them. Among the issues currently being discussed are audit reform – particularly in Europe –  and the development of international standards for non-financial information disclosure relating to sustainability, as well as the impact of technology, such as artificial intelligence, on the profession.

JICPA takes part in GAA events, such as the roundtable event for GAA’s Tax Directors Group, which was hosted by the Institute before the pandemic. “GAA events, such as roundtable discussions, give us great opportunities to exchange views and understand legal systems and practices in each region in depth. In addition to that, we can develop relationships with not only GAA members, but also other organizations and relevant parties through panel discussions with guest speakers,” Tezuka says.

It is also involved in GAA initiatives to further promote diversity and inclusion in the profession, and leveraging its GAA membership to support its members who are expanding the sphere of their activities, particularly for professional accountants in business. Tezuka explains that the GAA currently has working groups looking at the areas of tax, education, and sustainability. “We also have regular deep dive discussions on specific topics such as diversity, equality and inclusion. We share ideas and information discussed in the session with JICPA directors and groups in charge, and we leverage the ideas and information to develop our own strategy to strengthen our support for our members,” he says.

Before becoming the Chairman and President of JICPA in July 2019, Masahiko Tezuka served as a partner at Deloitte. At the firm, he held the positions of IFRS advisory group leader, integrated reporting advisory leader as well as managing partner in charge of industries.

“Having engaged in providing audit and consulting services to Japan’s leading corporations is a strength in developing a relationship with the economic community.”

A holistic view

Tezuka started his career in 1986 as an auditor with a member firm of PwC, where he became an audit partner within 13 years. He continued to move up the ranks, becoming chief operating officer of the firm with responsibility for its overall management between 2005 and 2007.

In October 2007, he joined Deloitte Touche Tohmatsu LLC as a managing partner. “I led the launch of new businesses, including setting up a group that supported the application of International Financial Reporting Standards (IFRS) and forming a consulting team for integrated reporting,” Tezuka says. He also served as an industry leader, supervising the four business lines of audit, consulting, tax, and financial advisory services, forming teams and marketing these services.

In 2016, Tezuka became an executive board member of JICPA, and took on his current position as Chairman and President three years after.

Looking back over his career, Tezuka says one of the most memorable moments was assuming a senior management position at an audit firm shortly after a major accounting fraud by a client had been discovered. He was tasked with reforming the firm. “Such an experience was a great asset for me,” he says. Tezuka also remembers being in charge of due diligence for the acquisition of a major listed company in the days when mergers and acquisitions (M&As) of Japanese companies were rarely conducted. “It was a very hard task, but it helped me a lot in my later career,” adds Tezuka.

He thinks his previous experience has been valuable preparation for his JICPA role, giving him a good insight into the practical aspects of managing a global audit firm. “I believe that my knowledge is helpful in communicating with firms and strengthening relationships with the International Federation of Accountants and other overseas institutions. Having engaged in providing audit and consulting services to Japan’s leading corporations is a strength in developing a relationship with the economic community,” he says, adding that during his career he has performed diverse duties in addition to audit work, which has enabled him to view the accounting profession from a holistic standpoint.

Tezuka’s work as Chairman and President of JICPA is wide-ranging. His days are packed with meetings with various stakeholders, while he regularly attends events and social gatherings in the evenings, although the COVID-19 pandemic has meant many of these have been moved online. Unsurprisingly, the pandemic has had a significant impact on CPAs in Japan, and Tezuka says when COVID-19 first struck, JICPA had to work with government bodies and other organizations to secure adequate time for them to close corporate accounts and auditing for the fiscal year ending 31 March 2020. It also issued guidance on practical audit considerations under remote work conditions for its members.

He considers the biggest challenge of his work to be meeting society’s expectations of CPAs. “Their work ranges widely from audit, assurance, consulting, tax and M&A services to fraud investigations. Going forward, sustainability-related services will expand,” he says. “To meet such needs, it is essential to deepen communication and cooperation with various stakeholders including the economic community, government bodies, councils, academics, and international institutions. JICPA especially focuses on stakeholder engagement.”

Future challenges

Looking forward, Tezuka thinks society faces many pressing long-term challenges, such as climate change and digitization. To identify these future challenges and steadily put in place measures to help manage them, JICPA is currently working on a vision paper looking 10 years ahead.

In the meantime, it published a Sustainable Development Goals declaration earlier this year, under which it sets out how CPAs can contribute to the three areas of economy, society, people and environment, such as through ensuring the reliability of corporate information, promoting innovation, and fostering awareness of sustainability. “As a professional partner, we will nurture trust, create a prosperous society, and build a brighter future,” Tezuka says. He adds that JICPA is also working on a CPA branding project to help people understand more about the value of CPAs. In addition, it is a signatory of Accounting for Sustainability’s Accounting Bodies Network Net Zero Commitment, under which 14 accounting bodies have pledged to achieve net-zero emissions within their own organizations and help their members to do likewise. “The JICPA has formed a cross-sectoral team to promote our commitment to achieve net-zero emissions. The team is working to formulate an action plan,” he says.

A key area for CPAs going forward will be the provision of non-financial information in relation to sustainability, Tezuka notes. “In recent years, society’s needs related to corporate disclosures have become more comprehensive, extending beyond the disclosure of financial information. Not only should we provide high-quality financial statements audits, but we should also examine how non-financial information should be assured in the face of increasing needs for such information,” he says.

With this in mind, JICPA is preparing a training curriculum to help its members develop sustainability literacy, particularly in terms of standards being developed on the disclosure of sustainable information, such as by the recently announced International Sustainability Standards Board of the IFRS Foundation.

JICPA has previously set up a Special Committee on Corporate Disclosure and Governance, and in June, it published a report looking at how to enhance the usefulness and trust in corporate disclosures, making recommendations such as increasing the scope of mandatory disclosures and introducing standards for non-financial reporting. “JICPA has conducted research on sustainability for almost 20 years and published the findings to support practices. Most recently, we published two research reports, one for introducing the basic issues of climate change and the other one relating to green bonds,” Tezuka says.

Tezuka, who graduated from the School of Economics of The University of Tokyo, became an executive board member of JICPA in 2016.

“The key is to keep working hard and stay humble. Then, broaden your horizons to find new opportunities and take on bold challenges.”

Technological change

Another area Tezuka thinks requires attention from the profession is technological developments. “While the advancement of technology has brought numerous benefits, such as increasing the efficiency of auditing, I think it has also created new challenges, for example, changes in required competences for auditors such as IT skills, due to the digitalization of audited companies,” he says. As a result, JICPA has been focusing on providing IT-related education for its members, and it is working on research looking at the skill set that CPAs will require in the future, as well as the education and training members will need in this area.

The pandemic, Tezuka adds, has accelerated digitalization both for the economy and for society. “With such changes, there are not only members promoting the digitalization of auditing processes from the standpoint of auditors, but also many members engaged in the transformation of corporate business processes from the standpoint of professional accountants in business or consultants.”

He points out that the CPA system in Japan was established more than 70 years ago to fulfil the need for experts in financial statements audits. “For that reason, Japanese CPAs have been recognized as ‘experts in audits’ by society.” he says. But since then, societal expectations for CPAs have expanded into other fields. “I believe that, in order to continue to meet the changing needs of society, it is essential that every CPA continues to pursue self-improvement. Needless to say, CPAs must have knowledge in accounting and auditing, but they also need to demonstrate a positive attitude and action to expand the sphere of their activities, as the range of fields where they can make social contributions has now expanded,” Tezuka says. He adds that JICPA supports this development of skills through providing the necessary information and training.

He says that young CPAs first need to believe in their abilities. “The key is to keep working hard and stay humble. Then, broaden your horizons to find new opportunities and take on bold challenges. If you can keep these up going forward, I am sure you will have a bright future,” Tezuka says.

An enthusiastic golfer

When he is not working, Tezuka used to be a keen footballer, but he has not played in recent years to avoid injury. “I now put my enthusiasm into playing golf. I really enjoy playing golf under the blue sky with my close friends or other golf club members on weekends. I am struggling to improve my scores though,” he says.

Tezuka adds that he also loves dogs, although he no longer has one after his beloved pet passed away five years ago. “I watch dog videos on YouTube to relax, instead of getting a new dog. If I had a little more time, I would love to have another dog.”

In Japan, the CPA system was introduced in 1948 under a new set of policies seeking to dissolve the nation’s industrial and financial cliques (zaibatsu), to popularize securities trading with citizens, and to increase the number of individual shareholders. The JICPA started as a voluntary organization in 1949 and later became a corporation under the CPA Act in 1966. Today, it has more than 33,000 members.

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