Field notes · 2 February 2026
What audit committees should ask before signing the year-end pack
A practical list of questions audit committee members in Japan can raise when reviewing draft financial statements and the auditor’s findings.
Audit committees do not re-perform the audit, but they do challenge how management closed the books and how the auditor responded to risk. Before the meeting, ask for a bridge from management’s flash results to the draft statements, including late adjustments and their rationale.
Useful questions include: Which accounts carried the highest risk of material misstatement this year? Were there disagreements with management that were resolved before the draft report? Did inventory observation identify cut-off issues at period end? How did the team treat related-party balances and significant estimates such as warranty or impairment?
In Japan’s March year-end cycle, committees often meet under tight calendars. Insist on receiving the management letter draft at least several days before the formal session so members can read findings without rushing the discussion.