Audit & Assurance
Statutory Audit(Corporate Law)
Corporate Law Audit, also known as statutory audit, is an audit conducted by certified public accountants or audit firms (auditors) to assess whether the financial statements, also referred to as "accounting documents," are being lawfully prepared. Companies that are required to undergo a Corporate Law Audit include those with a capital of 500 million yen or more or liabilities of 20 billion yen or more, among others. This audit is primarily carried out for the protection of shareholders and creditors.
In a Corporate Law Audit, the primary objective is to express an audit opinion on whether the financial statements accurately represent the company's financial condition for the benefit of shareholders and creditors. The financial statements subject to audit typically include the "balance sheet," "income statement," "statement of changes in shareholders' equity," and "notes to the financial statements" for each fiscal year. The results of the audit are reported to the general shareholders' meeting.
The audit conducted by the auditor goes beyond verifying the accuracy of the numerical values in the financial statements. It also indirectly assesses the effectiveness of "internal controls" that ensure the proper preparation of these documents and evaluates the "governance" functions performed by management and others.
We aim to provide Corporate Law Audit services that contribute to a deeper understanding of the company's situation and help address management challenges. We believe that communication with various stakeholders, including management, is essential to make the audit meaningful and strive to deliver services that leave clients satisfied and appreciative of the audit's value.
It's important to note that even companies that don't meet the size requirements mentioned above can opt for voluntary audits, and we are proactive in assisting such clients as well.
Audit for Regional Financial Institutions
Our members worked at a major audit firm's financial group and we are home to experienced members who have been providing accounting audit and consulting services to regional financial institutions such as regional banks, credit unions, cooperative banks, agricultural cooperatives, and labor banks. In addition to banking services, we have experience in various financial services, including insurance, credit cards, leasing, debt guarantees, and investment business associations. In the face of a changing and challenging economic environment, regional financial institutions are expected to provide continuous support to local small and medium-sized businesses. Our audit firm boasts partners who currently offer advisory services to small and medium-sized businesses. Through effective communication with our partners, we ensure a comprehensive understanding of your specific situation and deliver high-quality accounting audits tailored to your unique needs. Our team of experienced experts is capable of providing detailed services promptly and decisively, thanks to their extensive experience and specialized expertise. We take pride in our ability to provide efficient and specialized services for your benefit.
Audit for Public Sectors
We are equipped to handle not only statutory audits required by Corporate Law but also various other statutory audits, including: - Financial Services Agency Audits - Financial Instruments and Exchange Act Audits - Insurance Business Act Audits - Investment Trusts Act Audits - Cooperative Association Act Audits - Nonprofit Organization Audits - Pensions Act Audits - Registered Management Consulting Firm Act Audits - Independent Administrative Institution Audits - Special Corporation Audits - Others We have a team of members with specialized knowledge and extensive experience in various industries. We go beyond simply verifying the proper preparation of financial statements. We collaborate with your organization to understand its operational challenges and opportunities. From an accounting audit perspective, we provide valuable advice to assist your organization in achieving better business operations. Your success is our commitment.
Social welfare corporations that exceed certain thresholds (corporations with annual revenue exceeding 3 billion yen or liabilities exceeding 6 billion yen in the last fiscal year) are obligated to appoint an accounting auditor and undergo financial statement audits.
Medical corporations that exceed certain thresholds (corporations with liabilities exceeding 5 billion yen or revenue exceeding 7 billion yen in the last fiscal year), social medical corporations (corporations with liabilities exceeding 2 billion yen or revenue exceeding 1 billion yen in the last fiscal year), and regional medical cooperation promotion corporations are obligated to appoint an accounting auditor and undergo financial statement audits.
School corporations that receive subsidies of a specified amount or more (10 million yen or more) as stipulated by the Private School Promotion and Support Law are obligated to undergo financial statement audits.
Public interest corporations of a certain scale (corporations with liabilities exceeding 5 billion yen or revenue exceeding 100 billion yen, or total expenses and losses exceeding 100 billion yen in the final fiscal year) are required to appoint an auditor and undergo financial statement audits.
Other Statutory Audit
In addition to the cases mentioned above, we can also handle statutory audits in other situations. For example, businesses designated as certified facility operators based on the Specific Composite Resort Area Development Act are required to create various financial documents and submit them to the Minister of Land, Infrastructure, Transport and Tourism. These submissions include auditor's reports from certified public accountants, and our firm is capable of providing these services. Our firm boasts a team with extensive experience and expertise in regulatory requirements such as the quarterly reporting system and internal control reporting system for publicly listed companies. We not only ensure the accuracy of formal numerical data but also offer appropriate guidance as professional experts. Even in emerging sectors of industry, we leverage our accumulated knowledge and practical experience to support better business operations, and we remain committed to this mission.
Certified establishment and operating entities are obligated to submit financial reports containing accounting information. To ensure the accuracy and reliability of these financial reports, our audit firm conducts audits. The audit assurance service verifies that the numerical values and disclosures in the financial statements are appropriately prepared in accordance with the regulations of the Ministry of Land, Infrastructure, Transport, and Tourism, providing reasonable assurance about the fairness of the financial reporting.
Certified facility operators, like publicly listed companies, are obligated to submit quarterly reports every three months. To ensure the accuracy and reliability of these quarterly reports, our firm conducts quarterly reviews. Quarterly review services involve providing information on the performance and economic conditions detailed in the quarterly reports and verifying the accuracy of their contents.
Certified establishment and operating entities, like publicly traded companies, are required to submit internal control reports related to financial reporting. These internal control reports demonstrate the state of implementation of internal controls that ensure the reliability of financial information. Our audit firm evaluates the effectiveness of internal controls and provides reasonable assurance about the appropriateness of the internal control reports, ensuring that internal controls are functioning adequately.
Referral Audit
Referral audits refer to an audit process in foreign-owned companies where the parent company, which is located overseas, issues instructions (instructions referred to as "instructions") to the local (Japanese) auditors. The local auditors in Japan then conduct the audit of the Japanese subsidiary or entity based on these instructions. This audit includes audit planning, procedures, audit reports, and other audit-related deliverables. In cases where the parent company's auditors have a network office in Japan, they may delegate this work to the auditors at that network office. However, our audit firm can provide audit services of equal quality, flexibility in addressing required audit matters, and efficiency, all at a more reasonable price than a network office, in referral audits. Furthermore, we have a significant number of members with extensive experience in international matters. This allows us to prepare audit deliverables in English, communicate in English with overseas parent companies and auditors, and provide comprehensive support in English, as needed.
Voluntary Audit
A voluntary audit, also known as non-statutory audit, refers to an audit conducted by external auditors at the request of the client, which is not mandated by statutory requirements or the types of audits mentioned earlier. In today's environment, where the importance of compliance and adherence to legal regulations is increasing, engaging independent and specialized external auditors to conduct voluntary audits is not only a means to enhance transparency in your management structure to stakeholders but also a way to improve corporate value through the strengthening of your governance. We are capable of providing flexible audit services tailored to your specific needs and objectives. Whether it involves conducting voluntary audits as part of your internal management or for your subsidiaries, we are here to assist you with any questions or concerns you may have. Please feel free to reach out to our audit firm with your inquiries, no matter the nature of the issue.
AUP and Short Review
We are equipped to provide Agreed-Upon Procedures (AUP) services tailored to meet the needs of our clients. This includes the ability to perform AUP on financial statements of organizations such as Comprehensive Defined Benefit Corporate Pension Funds (Comprehensive DB) or the financial statements of Japanese subsidiaries of foreign multinational corporations. In addition to these services, we can also conduct customized AUP based on specific audit areas and evaluation criteria aligned with your objectives. Our Short Reviews are beneficial not only for companies considering a stock market listing but also for those who seek to establish robust management and governance systems equivalent to publicly-traded companies, or for those who recognize a need for improvements in their management without clear identification of the issues. Therefore, whether your company is actively considering an initial public offering (IPO) or if you are simply contemplating areas for improvement in your management and governance, we encourage you to reach out to our audit firm for a consultation to discuss how we can assist you in identifying and addressing your specific challenges.
Agreed-Upon Procedures (AUP) is a method used to collect and evaluate specific information related to particular business processes or procedures, typically conducted by an audit firm or a certified public accountant, based on agreed-upon procedures to serve specific purposes. AUP can be applied in various domains, including financial information, business processes, internal controls, risk assessments, and more.
A Short Review is an initial investigation conducted by an audit firm for companies considering an Initial Public Offering (IPO). Its purpose is to assess the current situation and identify areas of concern during the early stages of IPO preparation. To go public, a company needs to pass the listing examination of a stock exchange. Therefore, the Short Review performed by an audit firm covers not only financial statements but also areas like corporate governance, regulatory compliance, management systems, profit management systems including budgeting and monthly accounting, as well as transactions with related parties, among other subjects.
Business Audit and Internal Audit
We work in collaboration with our clients, taking into account their business objectives and current operating environment, to define the scope, verification levels, and methods of business audits that need to be conducted. We ensure that the audit services we provide are tailored to meet the specific needs of the client, involving top management and staff members in the process. This collaborative approach results in audit services that are well-suited to the client's unique circumstances, and it may also involve advising on in-house audits, which could include statutory audits. Moreover, our team includes members with extensive experience in internal audit-related tasks. They are capable of offering internal audit services such as co-sourcing, outsourcing, advanced advisory services, external assessments, and more, leveraging their expertise in internal audit functions.
Business audit, as opposed to financial auditing, is a type of audit that focuses on activities that are not directly related to the financial aspects of an organization. For example, auditing the compliance of directors’ duties with laws and articles of incorporation in statutory audits is categorized as operational auditing. This type of audit also encompasses the verification of various activities conducted by management and employees, such as research and development, purchasing, production, sales, service delivery, and general administrative tasks, to assess whether they meet the specific standards set by management for achieving the company’s objectives.
Internal audit is considered a part of business audit, and its role is to assess a company’s activities from the perspectives of legality and rationality in an impartial and independent manner, aiming for the effective achievement of management objectives. It involves providing advice and recommendations. Many organizations establish an internal audit department or designate individuals responsible for internal auditing within the organization.
In recent years, the importance of the role of internal audit has significantly increased due to factors such as globalization, digitalization, organizational restructuring through mergers, and the growing complexity of business activities. Given this context, there is a growing trend in Japan for companies to reevaluate their internal audit functions, including staffing, procedures, schedules, and consider seeking advice from external experts in specific areas. Additionally, companies are increasingly engaging in self-assessment and periodic external evaluations of their internal audit practices.
Audit & Assurance
Statutory Audit(Corporate Law)
Corporate Law Audit, also known as statutory audit, is an audit conducted by certified public accountants or audit firms (auditors) to assess whether the financial statements, also referred to as "accounting documents," are being lawfully prepared. Companies that are required to undergo a Corporate Law Audit include those with a capital of 500 million yen or more or liabilities of 20 billion yen or more, among others. This audit is primarily carried out for the protection of shareholders and creditors.
In a Corporate Law Audit, the primary objective is to express an audit opinion on whether the financial statements accurately represent the company's financial condition for the benefit of shareholders and creditors. The financial statements subject to audit typically include the "balance sheet," "income statement," "statement of changes in shareholders' equity," and "notes to the financial statements" for each fiscal year. The results of the audit are reported to the general shareholders' meeting.
The audit conducted by the auditor goes beyond verifying the accuracy of the numerical values in the financial statements. It also indirectly assesses the effectiveness of "internal controls" that ensure the proper preparation of these documents and evaluates the "governance" functions performed by management and others.
We aim to provide Corporate Law Audit services that contribute to a deeper understanding of the company's situation and help address management challenges. We believe that communication with various stakeholders, including management, is essential to make the audit meaningful and strive to deliver services that leave clients satisfied and appreciative of the audit's value.
It's important to note that even companies that don't meet the size requirements mentioned above can opt for voluntary audits, and we are proactive in assisting such clients as well.
Audit for Regional Financial Institutions
Our members worked at a major audit firm's financial group and we are home to experienced members who have been providing accounting audit and consulting services to regional financial institutions such as regional banks, credit unions, cooperative banks, agricultural cooperatives, and labor banks. In addition to banking services, we have experience in various financial services, including insurance, credit cards, leasing, debt guarantees, and investment business associations. In the face of a changing and challenging economic environment, regional financial institutions are expected to provide continuous support to local small and medium-sized businesses. Our audit firm boasts partners who currently offer advisory services to small and medium-sized businesses. Through effective communication with our partners, we ensure a comprehensive understanding of your specific situation and deliver high-quality accounting audits tailored to your unique needs. Our team of experienced experts is capable of providing detailed services promptly and decisively, thanks to their extensive experience and specialized expertise. We take pride in our ability to provide efficient and specialized services for your benefit.
Audit for Public Sectors
We are equipped to handle not only statutory audits required by Corporate Law but also various other statutory audits. We have a team of members with specialized knowledge and extensive experience in various industries. We go beyond simply verifying the proper preparation of financial statements. We collaborate with your organization to understand its operational challenges and opportunities. From an accounting audit perspective, we provide valuable advice to assist your organization in achieving better business operations. Your success is our commitment.
Social welfare corporations that exceed certain thresholds (corporations with annual revenue exceeding 3 billion yen or liabilities exceeding 6 billion yen in the last fiscal year) are obligated to appoint an accounting auditor and undergo financial statement audits.
Medical corporations that exceed certain thresholds (corporations with liabilities exceeding 5 billion yen or revenue exceeding 7 billion yen in the last fiscal year), social medical corporations (corporations with liabilities exceeding 2 billion yen or revenue exceeding 1 billion yen in the last fiscal year), and regional medical cooperation promotion corporations are obligated to appoint an accounting auditor and undergo financial statement audits.
School corporations that receive subsidies of a specified amount or more (10 million yen or more) as stipulated by the Private School Promotion and Support Law are obligated to undergo financial statement audits.
Public interest corporations of a certain scale (corporations with liabilities exceeding 5 billion yen or revenue exceeding 100 billion yen, or total expenses and losses exceeding 100 billion yen in the final fiscal year) are required to appoint an auditor and undergo financial statement audits.
Other Statutory Audit
In addition to the cases mentioned above, we can also handle statutory audits in other situations. For example, businesses designated as certified facility operators based on the Specific Composite Resort Area Development Act are required to create various financial documents and submit them to the Minister of Land, Infrastructure, Transport and Tourism. These submissions include auditor's reports from certified public accountants, and our firm is capable of providing these services. Our firm boasts a team with extensive experience and expertise in regulatory requirements such as the quarterly reporting system and internal control reporting system for publicly listed companies. We not only ensure the accuracy of formal numerical data but also offer appropriate guidance as professional experts. Even in emerging sectors of industry, we leverage our accumulated knowledge and practical experience to support better business operations, and we remain committed to this mission.
Certified establishment and operating entities are obligated to submit financial reports containing accounting information. To ensure the accuracy and reliability of these financial reports, our audit firm conducts audits. The audit assurance service verifies that the numerical values and disclosures in the financial statements are appropriately prepared in accordance with the regulations of the Ministry of Land, Infrastructure, Transport, and Tourism, providing reasonable assurance about the fairness of the financial reporting.
Certified facility operators, like publicly listed companies, are obligated to submit quarterly reports every three months. To ensure the accuracy and reliability of these quarterly reports, our firm conducts quarterly reviews. Quarterly review services involve providing information on the performance and economic conditions detailed in the quarterly reports and verifying the accuracy of their contents.
Certified establishment and operating entities, like publicly traded companies, are required to submit internal control reports related to financial reporting. These internal control reports demonstrate the state of implementation of internal controls that ensure the reliability of financial information. Our audit firm evaluates the effectiveness of internal controls and provides reasonable assurance about the appropriateness of the internal control reports, ensuring that internal controls are functioning adequately.
Referral Audit
Referral audits refer to an audit process in foreign-owned companies where the parent company, which is located overseas, issues instructions (instructions referred to as "instructions") to the local (Japanese) auditors. The local auditors in Japan then conduct the audit of the Japanese subsidiary or entity based on these instructions. This audit includes audit planning, procedures, audit reports, and other audit-related deliverables. In cases where the parent company's auditors have a network office in Japan, they may delegate this work to the auditors at that network office. However, our audit firm can provide audit services of equal quality, flexibility in addressing required audit matters, and efficiency, all at a more reasonable price than a network office, in referral audits. Furthermore, we have a significant number of members with extensive experience in international matters. This allows us to prepare audit deliverables in English, communicate in English with overseas parent companies and auditors, and provide comprehensive support in English, as needed.
Voluntary Audit
A voluntary audit, also known as non-statutory audit, refers to an audit conducted by external auditors at the request of the client, which is not mandated by statutory requirements or the types of audits mentioned earlier. In today's environment, where the importance of compliance and adherence to legal regulations is increasing, engaging independent and specialized external auditors to conduct voluntary audits is not only a means to enhance transparency in your management structure to stakeholders but also a way to improve corporate value through the strengthening of your governance. We are capable of providing flexible audit services tailored to your specific needs and objectives. Whether it involves conducting voluntary audits as part of your internal management or for your subsidiaries, we are here to assist you with any questions or concerns you may have. Please feel free to reach out to our audit firm with your inquiries, no matter the nature of the issue.
AUP and Short Review
We are equipped to provide Agreed-Upon Procedures (AUP) services tailored to meet the needs of our clients. This includes the ability to perform AUP on financial statements of organizations such as Comprehensive Defined Benefit Corporate Pension Funds (Comprehensive DB) or the financial statements of Japanese subsidiaries of foreign multinational corporations. In addition to these services, we can also conduct customized AUP based on specific audit areas and evaluation criteria aligned with your objectives. Our Short Reviews are beneficial not only for companies considering a stock market listing but also for those who seek to establish robust management and governance systems equivalent to publicly-traded companies, or for those who recognize a need for improvements in their management without clear identification of the issues. Therefore, whether your company is actively considering an initial public offering (IPO) or if you are simply contemplating areas for improvement in your management and governance, we encourage you to reach out to our audit firm for a consultation to discuss how we can assist you in identifying and addressing your specific challenges.
Agreed-Upon Procedures (AUP) is a method used to collect and evaluate specific information related to particular business processes or procedures, typically conducted by an audit firm or a certified public accountant, based on agreed-upon procedures to serve specific purposes. AUP can be applied in various domains, including financial information, business processes, internal controls, risk assessments, and more.
A Short Review is an initial investigation conducted by an audit firm for companies considering an Initial Public Offering (IPO). Its purpose is to assess the current situation and identify areas of concern during the early stages of IPO preparation. To go public, a company needs to pass the listing examination of a stock exchange. Therefore, the Short Review performed by an audit firm covers not only financial statements but also areas like corporate governance, regulatory compliance, management systems, profit management systems including budgeting and monthly accounting, as well as transactions with related parties, among other subjects.
Business Audit and Internal Audit
We work in collaboration with our clients, taking into account their business objectives and current operating environment, to define the scope, verification levels, and methods of business audits that need to be conducted. We ensure that the audit services we provide are tailored to meet the specific needs of the client, involving top management and staff members in the process. This collaborative approach results in audit services that are well-suited to the client's unique circumstances, and it may also involve advising on in-house audits, which could include statutory audits. Moreover, our team includes members with extensive experience in internal audit-related tasks. They are capable of offering internal audit services such as co-sourcing, outsourcing, advanced advisory services, external assessments, and more, leveraging their expertise in internal audit functions.
Business audit, as opposed to financial auditing, is a type of audit that focuses on activities that are not directly related to the financial aspects of an organization. For example, auditing the compliance of directors’ duties with laws and articles of incorporation in statutory audits is categorized as operational auditing. This type of audit also encompasses the verification of various activities conducted by management and employees, such as research and development, purchasing, production, sales, service delivery, and general administrative tasks, to assess whether they meet the specific standards set by management for achieving the company’s objectives.
Internal audit is considered a part of business audit, and its role is to assess a company’s activities from the perspectives of legality and rationality in an impartial and independent manner, aiming for the effective achievement of management objectives. It involves providing advice and recommendations. Many organizations establish an internal audit department or designate individuals responsible for internal auditing within the organization.
In recent years, the importance of the role of internal audit has significantly increased due to factors such as globalization, digitalization, organizational restructuring through mergers, and the growing complexity of business activities. Given this context, there is a growing trend in Japan for companies to reevaluate their internal audit functions, including staffing, procedures, schedules, and consider seeking advice from external experts in specific areas. Additionally, companies are increasingly engaging in self-assessment and periodic external evaluations of their internal audit practices.