Our company's internal control system is based on the supervision by the Board of Directors, audits by Outside Directors and Independent Outside Audit & Supervisory Board Members, and accounting audits, as well as the effective functioning of the 3 defense lines under the direction of execution (under President and Representative Director). (1) Each department controls risks by incorporating self-management into daily operations, and ensures the legality of operations. (2) The management division supports the division in each specialized field and monitors the status of self-management. (3) We have established an "Internal Audit Department" under the direct control of the President and Representative Director, and its staff implement "Internal Audits" and "Assessment of Internal Control over Financial Reporting (J-SOX)" from an independent and objective standpoint. The Internal Audit Department conducts internal audits of domestic and overseas offices and affiliated companies. In this way, the effectiveness of internal controls in each division is evaluated, and the results are reported to the President and Representative Director, Audit & Supervisory Board Members, division heads, and relevant executives. The departments that receive advice and proposals for improvement systematically make improvements, and the Internal Audit Department conducts follow-up audits as necessary.
On February 6, 2020, Internal Audit Department held ‘The Second Departmental Training on Internal Audit’ at our head office in Marunouchi, Tokyo, and audit managers from 10 affiliated companies participated in the training. Every department is required to strengthen internal control for compliance and risk management. Internal Audit Department at the head office designed such training and audit quality improvement support so that the auditors at each (affiliated) company can acquire specialized skills as early as possible and contribute to strengthening our corporate governance.
On July 12, 2019, Idemitsu Kosan held a training meeting for the internal audit departments of nine affiliated companies. After sharing information regarding each company’s internal audit system and current challenges, the participants actively exchanged opinions on Idemitsu Kosan & Showa Shell post-merger internal audit system and audit areas to be focused on. Through the training, the nine affiliated companies established closer cooperation with each other.