Due to the recent scandal of listed companies in United States and Asia, stock exchange and regulatory bodies of different Asian countries have developed different level of regulatory requirements over corporate governance.
In China, China Securities Regulatory Commission has requested that all listed companies in China to strengthen their internal control systems and internal management through regular review of and assessment on the integrity, validity and effectiveness of their internal control systems. It also requires disclosure of relevant information through an external audit review of the company's internal control systems and self-assessment reports. The State-owned Assets Supervision and Administration Commission together with Shanghai and Shenzhen Stock Exchange have issued their respective guidance on and requirements for corporate risk management and internal control.
For listed companies in Hong Kong, the Stock Exchange of Hong Kong Limited published the Code on Corporate Governance Practices and Corporate Governance Report in November 2004 and both of them became effective for accounting periods beginning on or after 1 January 2005. Whereas for pre-listed companies, Listing Rule 3.A 15 (5) (Main Board) / 6A.15 (5) (GEM Board) in Hong Kong requires the sponsors to make due diligence inquiries over the financial procedures, systems and controls of the new applicants.
In Japan, the Financial Instrument and Exchange Law was passed by Japan's Congress on 7 June 2006. The Business Accounting Council of the Japanese Financial Services Agency, a Japan regulatory body equivalent to the SEC has released the final report on the Standards of the Implementation Guidance for Management Assessment and Audit of Internal Control over Financial Reporting ("ICFR"). Under this regulatory requirement, management will need to assess the design and operating effectiveness of ICFR and report the results in its filings. The independent auditor will provide an attestation of the effectiveness of management's assessment.