Governance Integrity Assessment

External assessment regarding the post-incident implementation of fraud control measures

The environment surrounding companies is undergoing dramatic changes, as exemplified by the increasing globalization of business activities, expansion in scale resulting from mergers and acquisitions, and the diversification of business line. Against this backdrop, there seems to be an endless series of fraud and misconduct (hereinafter collectively referred to as “fraud”) coming under light. As a result of the globalization of business activities, companies are now being exposed to various forms of fraud perpetrated by or against their subsidiaries both at home and abroad, and it is becoming increasingly difficult, even for those companies implementing appropriate measure to mitigate fraud risk, to completely prevent fraud.

In the event of any fraud, companies will be required to have the incident investigated by internal and external investigation committees or other similar functions to identify the background and factors that led to the fraud. At the same time, they will be required to implement various remedial and preventive measures as well. Furthermore, they will have to develop and implement an effective fraud control program so as to prevent the occurrence of fraud induced from similar factors. 

Governance integrity assessment designed to satisfy stakeholders’ demand

Due to the increasing importance of compliance, companies are now being required to demonstrate their accountability to more diverse stakeholders than ever. The scope of accountability is also widening, and companies are often required to disclose not only fraud investigation results but also report the status of progress on the implementation of fraud prevention measures typically by means of filing an improvement report or an improvement status report.

In our governance integrity assessment services, we conduct a third-party assessment of the integrity of your organization’s governance structure—i.e., the adequacy of the business management systems (organizational structure, reporting lines, etc.) in place; internal rules such as policies, bylaws, and manuals; check and review systems; and employee training programs (retention, penetration)—and help satisfy your stakeholders’ demand.

Governance integrity assessment

In our governance integrity assessment, we assess whether the fraud prevention measures established by your organization are sufficient and have been implemented properly to maintain the integrity of your governance structure, utilizing our governance assessment tools and various methodologies concerning corporate governance.

【Major assessment items】

By applying our unique viewpoint, we assess whether specific tasks have been sufficiently established for each fraud prevention measure and, if necessary, present challenges and additional measures as appropriate.

As a way to examine whether each fraud prevention measure is functioning properly, we establish a benchmark for the completion of each task (e.g., definition of deliverables upon completion of the task) to assess the status of progress.

For each fraud prevention measure and relevant specific tasks, we provide an overall assessment based on their adequacy and status of progress.

Our governance integrity assessment services are not only for those companies where fraud has been found. We can conduct a third-party assessment on the status of implementation of fraud prevention measures by a company upon request from its group headquarters, leading creditor banks, business partners, and so forth.