The Bank’s Internal Audit Division examines and evaluates whether internal control systems function properly and effectively, independently of all the business units. The purpose of an audit is to verify the effectiveness and efficiency of operations, compliance with laws and regulations, reliability of financial statements and appropriateness of risk management. All activities and entities of the Aozora Group fall within the scope of Internal Audit. Our Internal Audit Division also conducts an assessment of overall internal control and operational processes related to the Internal Control Report on financial reporting based on the Financial Instruments and Exchange Act.
Our Internal Audit Division conducts internal audits in line with the Audit implementation plan, which is formulated according to the Annual Audit Plan approved by the Board of Directors each fiscal year. In formulating the Audit implementation plan, we consider the frequency and intensity of the audit depending on the type and degree of inherent risk within each business unit and the status of internal controls. The Bank also conducts cross-sectional target audits. Our auditing efforts particularly focus on business operations or products with expanding assets or transaction volume, new businesses or products, the risk management of these businesses and products and customer protection systems of risk products, all in consideration of recent changes in the financial and economic environment.
We report audit results to the Management Committee monthly, as well as a semi-annual Summary of Audit to the Audit and Compliance Committee and the Board of Directors, providing an independent assessment of the internal control system.
To strengthen our internal audit capabilities, we have continued to enhance the necessary infrastructure and developed new audit methodologies. To raise staff expertise, we also encourage employees to obtain professional certifications such as Certified Internal Auditor and Certified Information System Auditor. In addition, we work with external auditors and conduct internal quality assessment to further enhance our audit standards and capabilities.
