No.49 Internal Control

• Japanese

SPECIAL FEATURE

On March 13, 2006, the "Bill for Partial Amendments to the Securities Law" (Financial Instruments Sales Law) was presented to the Diet. In this bill it is stipulated that the "strengthening of internal controls for financial reporting" will be applied from the beginning of the business year after April 1, 2008. On the other hand, under the new corporate law which went into effect on May 1, 2006, the board of directors is required to decide on the basic policy for the establishment of an internal control system and to disclose it by means of business reports. It can be said that the era has arrived when internal controls is being discussed seriously in Japan.
When it comes to internal controls, backward-looking arguments on such matters as the prevention of fraud, compliance with laws and regulations, and the documentation burden required to comply with the corporate reform law may tend to increase. In fact, however, it has the potential to be a strong driving power for the promotion of process innovation and the evolution of enterprise DNA.
The release of financial statements that can be trusted by investors and the compliance with applicable laws and regulations are the central aims of the internal controls. Along with these, the objective of achieving effectiveness and effectiveness and efficiency of operations is clearly defined, for which standardization and the securing of transparency of business processes are essential. It is not an exaggeration to say that the improvement of internal controls itself is the construction of the mechanism which will greatly contribute to the promotion of efficiency in business operations and the visualization of enterprise management.
In addition, by building these processes into daily operations utilizing information technology (IT), the operating infrastructure of enterprises can be further strengthened. This is definitely expected to become a trigger for solving the vulnerability of processes and IT governance in enterprise groups which Japanese enterprises have been considering a challenge.
This special issue discusses internal controls from various viewpoints including IBM's own case and introduces their diversity and spread as well as various approaches.

• Foreword to Special Issue on Internal Control
  Kakutaro Kitashiro

1. The Background of Japanese SOX and the Impact of Internal Controls
   Susumu Nakazawa
   
   
2. The Establishment of IT Governance with Implementation of Internal Controls
   Shinichi Nakashio

1. Prof. Shinji Hatta, Graduate School of Professional Accountancy, Aoyama Gakuin University
   'Globalization' and 'Up-to-date' are Themes of Internal Controls in Japan.
   
   
2. Business Controls, IBM Japan, Ltd.
   Participation by All Employees, together with Constant Review, Is Essential for Internal Controls.

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1. Japanese SOX and Approach for Internal Control Project
   Kazuyuki Kaijoh, Certified Public Accountant, Financial Management, IBM Business Consulting Services KK
   
   
2. IT Solution Framework for Internal Controls
   - What are IT Solutions to Support the Realization of Objectives of Internal Controls -
   Yoshinobu Ishigaki, IBM Distinguished Engineer, Member of IBM Academy, e-Security Officer of AP/Japan, IBM Japan, Ltd.
   Akira Sakakibara, IBM Distinguished Engineer, Member of IBM Academy, Tokyo Research Laboratory, IBM Japan, Ltd.
   
   
3. Internal Control using ERP Package
   Toshiyuki Kurokawa, Associate Partner, Value Delivery Center, IBM Business Consulting Service KK

• [column] Internal Control of Outsourcing Business

1. A Case of Efficiently Establishing a Set of Information Security Rules
   Rieko Katakai, IBM Business Consulting Service KK
   
   
2. Disclosure Management Realized at Low Cost.
   - The New Access Control Model for the Protection of Personal Information -
   Tadahiro Kawaoka, Atsushi Sumida, IBM Japan Systems Engineering Co.,Ltd.
   
   
3. An Implementation for Security Audit Log in 3-Tier Web Client-Server System
   Yasuhiro Ohmori, Tomohiko Ohtsuka, Rie Shionoya, IBM Japan Systems Engineering Co.,Ltd.
   
   
4. Effective ITIL Design Techniques
   Kaori Okada, IBM Japan, Ltd.

• Professional of Information Technology
  
  
• Artisanal Skills
  --The Competency Process--
  
  
• VISION NOW
  
  
• Back Numbers
  
  
• From the Editor

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[ PROVISION | No.49 ]