Audit structure and internal controls
Audit system
Audits conducted by the Audit & Supervisory Committee
Audits are conducted by the Audit & Supervisory Committee, which consists of one internal director and three outside directors. In addition to attendance at key meetings of the Board of Directors, directors who are Audit & Supervisory Committee members conduct individual meetings with those in charge of sales departments and the Corporate Planning Division, in order to make decisions on important management-related matters (including on the processes thereof) and audit the appropriateness of the execution of duties by each director (excluding members of the Audit & Supervisory Committee) and executive officer.
The Audit & Supervisory Committee’s main considerations include the creation of audit policies, plans, and reports; the appointment and dismissal of the Audit & Supervisory Committee chair; the appointment and dismissal of internal Audit & Supervisory Committee members; the evaluation of the accounting auditor and its reappointment or non-reappointment; the approval of the accounting auditor regarding its remuneration; and the decision-making process concerning the appointment of directors and their remuneration.
Internal Audit
In regard to internal audits, the Company has established the Internal Auditing Department (consisting of seven members as of June 18, 2024) directly under the president, CEO & COO. The Internal Auditing Department conducts audits on the appropriateness and efficiency of the Company’s business activities from a fair and independent point of view. The Internal Auditing Department also evaluates the status of the implementation and operation of internal controls concerning financial reporting in accordance with the Financial Instruments and Exchange Act.
Accounting Auditor
Deloitte Touche Tohmatsu LLC
System for Joint Audits
Cooperation between the Audit & Supervisory Committee and the Accounting Auditor
The Audit & Supervisory Committee meets with the accounting auditor at the beginning of the fiscal year to discuss audit plans and key audit items, regularly receives explanations of the results of the accounting auditor’s audits, and holds meetings as necessary to exchange information and opinions. In addition, Audit & Supervisory Committee members attend audits conducted by and review meetings held by the accounting auditor to receive explanations on the status of financial reporting and internal controls, along with explanations on proposals for improvement. This collaboration with the accounting auditor leads to more efficient and effective audits.
Cooperation between the Internal Auditing Department and the Audit & Supervisory Committee
As well as regularly receiving reports on audits conducted by the Internal Audit Department, the Audit & Supervisory Committee reviews the status of business execution by each department and subsidiary and notifies and exchanges opinions with the Internal Audit Department regarding the results of audits conducted by the Audit & Supervisory Committee. Moreover, the Audit & Supervisory Committee conducts efficient audits through close cooperation with the Internal Audit Department, to which it provides information and requests investigations as necessary.
Cooperation between the Internal Audit Department and the Accounting Auditor
The Internal Audit Department holds timely meetings with the Accounting Auditor to exchange information and discuss matters such as audit plans, status of audits, and audit results.
Internal Control
Our Basic Policy on Internal Control System was formulated in May 10, 2006 to serve as a set of fundamental guidelines for the establishment of a framework for ensuring the appropriate execution of business toward realizing sound corporate management and sustainable growth.
Since then, this policy has been amended to reflect changes in the Group’s business environment and business activities.