Internal Control

Internal Control over Financial Reporting

Summary

• Under guidelines determined by the J-SOX Committee, internal controls ranging from those at the company-level to business processes are all documented.
• Systems to enable objective assessments are also in place at Hitachi business units and major Group companies.

To ensure the reliability of consolidated financial reporting, the Group develops and uses control documents ranging from company-level to business process controls based on the guidelines determined by our J-SOX Committee. Business units within Hitachi, Ltd. and major Group companies have developed mechanisms to objectively perform assessments.
The J-SOX Committee office collects the results of the assessments performed by each business unit and company, and assesses the effectiveness of internal control across the entire Group.

Hitachi Group Internal Control Assessment Framework

Toward a More Integrated "Tripartite Audit" Function

Summary

• We are working to strengthen the "tripartite audit" function, which comprises the Audit Committee, the internal audit section, and the external auditing firm.

We are working to further enhance the effectiveness of the internal control exerted through the integrated work of a "tripartite audit" function comprising the Audit Committee; our internal audit sections, principally, the Internal Auditing Office; and external auditing firm. Through close communication, the three functions share information about risks and evaluation of risk responses; ensure the audit process is transparent with appropriate checks and balances; and improve the effectiveness of internal control systems.

Improving Internal Control through a "Tripartite Audit" Function

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