The much higher barriers to enter the public accounting profession in Japan (as compared with other major industrialized countries) has resulted in a relatively small number of CPAs in that nation. Identify and briefly discuss the comparative advantages and disadvantages of high barriers to entry for a given profession.

To prevent Kanebo, Ltd. from being forced to liquidate, the Japanese federal government placed the company in a "rehabilitation" program under the direction of the Industrial Revitalization Corporation of Japan (IRCJ). The government-sponsored and government-funded IRCJ had been created in April 2003 to help financially distressed companies obtain the capital they needed to survive and to provide them with "turnaround" advice from professional business consultants. Under the leadership of the IRCJ, Kanebo sold off its large cosmetics subsidiary and received more than $1 billion in government-guaranteed loans and waivers of outstanding loans. In 2006, a large investment fund purchased a majority of Kanebo's stock and took over control of the company from the IRCJ.

ChuoAoyama lost approximately one-third of its audit clients, including more than 200 publicly listed clients, during the two-month suspension imposed by the FSA. These companies included ChuoAoyama's two most high profile audit clients, Sony Corporation and Toyota Motor Corporation. While serving the suspension, ChuoAoyama underwent an extensive internal review to strengthen its quality control functions and changed its name to the Misuzu Audit Corporation.¹⁷