Internal Control System
Improvements to our Internal Control System:Building the Foundations for a Fair and Impartial Corporation
The Marubeni Group began the MARICO Project (Marubeni Internal Control System Project) in fiscal 2004. Thus far, the structure for the internal control system over financial reporting has been completed. Henceforth, the project will continuously and aggressively move toward achieving a higher level of control.
The Objectives of the MARICO Project
Trustworthy Financial Reporting
There have been many reports in the media about major Japanese companies using fraudulent or embellished figures in financial reportings. One solution to these kinds of problems that has gained attention is establishing and maintaining internal control systems.
In general, internal control systems have three purposes: to increase the effectiveness and efficiency of operations to ensure reliable financial reporting, and to guarantee compliance. The MARICO system was begun in 2004 to ensure the reliability of financial reporting.
The Marubeni Group possesses many internal controls that have already been developed, and the goal of the MARICO system is to leverage and integrate them into a system with a higher level of transparency and efficiency.
Documentation and Monitoring Internal Control Systems
In 2004, we began the process of documentation on-site business processes, all aspects of IT systems management, and internal controls of organizations within the Marubeni Group. The most crucial part of this process was documenting control mechanisms for managing risks related to unforeseeable accidents In 2005, these were audited to ensure that the controls in place were adequate and properly implemented. We were able to verify that our internal control systems were functioning effectively.
These tasks are of a massive scale, which places responsibility on not only our executives and managers, but also on every employee. The two-year effort by every employee and executive has resulted in the completion of the basic system.
Objectives and Components of Internal Control
Immediate Compliance with New Legislation
Establishing and maintaining an internal control system is an ongoing process. It is important to evaluate the sufficiency of control, and the status of inspections and evaluations at each site annually.
The Law on Sales of Financial Products (also known as the "Investment Services Law") submitted to the Diet in March of this year includes provisions requiring managements to submit internal control evaluation reports over financial reporting and to obtain an attestation by outside auditors over such reports.Through the MARICO System, Marubeni is ready for these new laws.
The MARICO Project will continue to adapt to changes in the regulatory environment, and expand into areas outside of financial reporting, while simultaneously working toward a higher level of internal control.
The MARICO Project Cycle at Individual Sites
