The Internal Audit Department (four persons), which is under the direct supervision of the CEO, implements internal audits of the operations of all departments based on the rules and regulations of internal audits and the Internal Audit Plan determined each term. The results of these audits are reported to directors and Audit & Supervisory Committee members. The CEO issues instructions for improvement to each relevant department based on audit results, and the efficacy of internal audits is secured by requiring written reports on the status of improvements.
Audits by the Audit & Supervisory Committee
The Audit & Supervisory Committee comprises three outside directors. The Company appoints Audit & Supervisory Committee members who have a deep understanding and knowledge of the business environment and who are experts in various fields, including legal and accounting/tax experts. These members also do not present any conflict of interest with general shareholders.
Based on the Audit Policy and Audit Plan determined by the Audit & Supervisory Committee, Audit & Supervisory Committee members conduct audits of the business execution of directors by investigating matters such as the status of operations and financial assets. Also, Audit & Supervisory Committee members attend other important meetings, including meetings of the Executive Committee, sharing opinions and inspecting important documents circulated for approval and other related materials. In these ways, Audit & Supervisory Committee members carry out their audits. As a general rule, the Audit & Supervisory Committee Meeting is held once a month. Through mutual contact and cooperation performed in an appropriate manner, the Audit & Supervisory Committee conducts audits on the various risks that are difficult to visualize within organizational management in a manner that is independent from business execution.
As for accounting audits, the Company has concluded an audit contract with Ernst & Young ShinNihon LLC. Ten certified public accountants assist with accounting audit work, in addition to twenty-nine other members.
Mutual Cooperation between the Audits by Audit & Supervisory Committee, Internal Audit Department, and Accounting Auditors as well as the Relationship of Audits with the Internal Control Department
The Audit & Supervisory Committee cooperates with the Internal Audit Department to conduct audits. The Audit & Supervisory Committee also receives quarterly reports from the accounting auditors on the results of accounting audits. Moreover, the Committee holds meetings with the accounting auditors on a timely basis to exchange opinions and information, thereby working to realize mutual cooperation.
In addition to assisting in the duties of the Audit & Supervisory Committee, the Internal Audit Department holds monthly meetings with the Audit & Supervisory Committee, where reports are made on the results and progress of audits, including the Audit Plan, and opinions and information are exchanged. The Internal Audit Department also reports on the operational status of the Company’s internal reporting system. In these ways, the department aims to achieve mutual cooperation with the Audit & Supervisory Committee. Moreover, the department exchanges opinions and information related to internal controls and governance based on the Financial Instruments and Exchange Act with accounting auditors. In doing so, the department facilitates close cooperation in order to improve the efficacy and efficiency of audits.
Also, the Internal Control Department evaluates issues raised by these various types of audits and makes efforts to implement the necessary response.