The Bank's Internal Audit Division examines and evaluates whether internal control systems function properly and effectively, and independently of all the business units. The purpose of an audit is to verify 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 the internal audit. Our Internal Audit Division also conducts assessment of overall internal controls and operational process 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 Plan, approved by the Board of Directors each fiscal year. In formulating the Audit Plan, we consider the frequency and intensity of the audit depending on the type and degree of inherent risk within each business unit and status of internal controls. The Bank also conducts cross-sectional target audits.
We focus audit efforts particularly on business operations or products with expanding assets or transaction volume, new businesses or products, as well as the risk management, customer protection systems of risk products and management for facilitation of financing for SMEs, 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 Compliance Committee and the Board of Directors, providing an independent assessment to the internal control system.
To strengthen our internal audit capabilities, we have continued to enhance the necessary infrastructure and developed new audit methodologies. To enhance 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.
