Article

Personal Independence at Deloitte Tohmatsu Group

This page provides a brief summary of Personal Independence that Deloitte Tohmatsu Group Partners, Professional Staff and their Immediate Family Members are required to maintain. We kindly ask that you deepen your understanding of Personal Independence and cooperate in adhering to the laws and regulations regarding independence.

Explore Content

Personal independence rules at Deloitte Tohmatsu Group

What is independence?

Independence means to remain in a independent position both of mind and in appearance and objectivity are exercised with respect to Audit Clients and their group companies (hereinafter referred to as the "Audit Clients"). 

 

Who has to maintain independence?

Independence laws and regulations require Deloitte Tohmatsu Group Partners and Professional Staff, and their Immediate Family Members *1.

In the Deloitte Tohmatsu Group, Professional Staff refers to those who provide any professional services to clients regardless whether which is audit service or not.
 

*1 Specifically, Immediate Family Members are:
ⅰ Spouse or spousal equivalent (partners of the same gender or partners not legally married may be included)
ⅱ Dependents (whether living together or not)

 

If Immediate Family Members or Close Family Members *2 manage entities as a sole proprietorship, independence rules are applied to such entities.

*2 Close Family Members refers to a parent, child or sibling who is not an Immediate Family Member. Depending on the applicable independence laws and regulations, step-parents and step-children may be included in this term.

 

What is personal independence?

Independence that Deloitte Tohmatsu Group Partners and Professional Staff, and their Immediate Family Members should maintain is called personal independence.

In order to maintain personal independence, there may be restrictions on having the following relationships with the Audit Clients:

  1. Financial relationships
  2. Employment or other relationships
     

Financial relationships

What are financial relationships in personal independence?

Deloitte Tohmatsu Group establishes an independence policy about financial relationships to comply with laws and regulations regarding personal independence.

The main independence policy about financial relationships of Deloitte Tohmatsu Group is as follows:
 

  • Bank account is an account for depositing or withdrawing money, as well as for various types of money transactions through banks, including checking and savings accounts. Some accounts are also available for investing the mutual funds or bonds, etc.
  • In certain cases, bank accounts of Audit Clients of Deloitte Tohmatsu Group may be subject to restrictions, such as prohibiting from holding accounts, encouraging to close accounts, and limiting the account balance to amounts that are fully insured by the deposit insurance system.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether a bank is an Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about accounts on the internal website of Deloitte Tohmatsu Group. If financial instruments such as mutual funds and bonds can be traded in a bank account, the account is required to be registered in GIMS.
  • Securities account is an account held at an institution in which stocks, mutual funds, bonds, and other financial instruments can be traded.
  • In certain cases, securities accounts of Audit Clients of Deloitte Tohmatsu Group may be subject to restrictions, such as prohibiting from holding accounts, encouraging to close accounts, and limiting the account balance to amounts that are insured by investor protection system. All members of Deloitte Tohmatsu Group are prohibited from holding the discretionally investment accounts.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether a securities company is an Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about accounts on the internal website of Deloitte Tohmatsu Group. The securities account is required to be registered in GIMS.
  • Examples of investment relationships include stocks, mutual funds, bonds, etc. that are traded through securities companies or banks. Investment relationships include those traded through Japanese tax exemption programs for small investments (Nippon Individual Savings Account ("NISA")), individual-type defined contribution plans (iDeCo), corporate-type defined contribution plans (corporate DC) or employee stock purchase plan.
  • Investmenst relationships related to Audit Clients of Deloitte Tohmatsu Group may be restricted to hold in certain cases.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether stocks, mutual funds, bonds, etc. are related to Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about stocks, mutual funds, bonds, etc. on the internal website of Deloitte Tohmatsu Group. The stocks, mutual funds, bonds, etc. are required to be registered in GIMS.
  • Examples of insurance product include life insurance, fire insurance, and car insurance. There are two types of insurance product: fixed amount insurance, in which the amount of insurance money, cash surrender value, and maturity insurance money ("insurance money, etc.") is fixed at the time of the contract, and variable insurance, in which the amount of insurance money, etc. varies depending on performance of the underlying investment of mutual funds, etc. in special account. Insurance companies and financial instruments managed under variable insurance are subject to personal independence.
  • When entering into insurance contracts with Audit Client of Deloitte Tohmatsu Group, in certain cases new contracts may be prohibited, or required to meet certain conditions before entering into contracts.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether insurance companies or financial instruments managed under variable insurance are related to the Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about insurance product on the internal website of Deloitte Tohmatsu Group. Variable insurance is required to be registered in GIMS.
  • There are credit cards of various brands (Visa, Mastercard, American Express, JCB, etc.). However, they are required to maintain independence since temporary debts are incurred until payment is made to the credit card issuer and guarantor company (the company that will make subrogation payments in the event of a default on payment).
  • A credit card issued or guaranteed by Audit Client of Deloitte Tohmatsu Group may be prohibited to hold, recommended cancellation, or required to meet certain conditions in certain cases.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether the company which issue or guarantee the credit card is the Audit Client by searching DESC. Partners and Professional Staff can also confirm independence policy about credit card on the internal website of Deloitte Tohmatsu Group.
  • Loans include loan contracts such as mortgage loans and car loans, as well as overdraft facility. For loans and loan guarantee contracts, the financial institution that enters into the contract is subject to personal independence.
  • A loan or loan guarantee contract with Audit Client of Deloitte Tohmatsu Group may be prohibited, or required to meet certain conditions in certain cases.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether financial institution related to loans and guarantees is the Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about loans and guarantees on the internal website of the Deloitte Tohmatsu Group.
  • This is a cashless payment method (PayPay, Rakuten Pay, d payment, au Pay, etc.) in which payments are made via an app installed on a smartphone, and since receivables are generated from the payment service provider at the time of deposit, independence is required.
  • When using smartphone payment services provided by Audit Client of Deloitte Tohmatsu Group, the amount of deposit for payment may be limited in certain cases.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether the payment service provider is the Audit Client by searching DESC. Partners and Professional Staff can also confirm the independence policy about smartphone payment service on the internal website of the Deloitte Tohmatsu Group.
  • Crypto-assets (Cryptocurrencies) can be used as compensation for goods or services on internet, or exchanged with legal currencies such as yen or dollars through exchanges. Representative crypto-assets (cryptocurrencies) include Bitcoin (BTC) and Ethereum (ETH). There are also security tokens, which are the digital securities such as stocks and bonds created by blockchain technology, and digital asset tokens, which are registered with the stock exchange. Since the deposit of crypto-assets generates a creditor-debtor relationship with the virtual currency exchange service provider, and since security tokens may represent an investment relatonship in the issuer, there are certain restrictions on transactions and holdings if the virtual currency exchange service provider or issuer of security tokens, etc. is an Audit Client, etc.
  • If the crypto-assets (cryptocurrencies) exchange trader or issuer is Audit Client of Deloitte Tohmatsu Group, transactions with the exchange trader which is the Audit Client or holding of crypto assets (cryptocurrencies) issued by the Audit Client may be prohibited in certain cases.
  • Deloitte Tohmatsu Group Partners and Professional Staff can identify whether the crypto-assets (cryptocurrencies) exchange trader and issuer are Audit Clients by searching DESC. Partners and Professional Staff can also confirm the independence policy about crypto-assets (cryptocurrencies) on the internal website of the Deloitte Tohmatsu Group.

Employment or other relationship

Employment of Immediate Family Members and Close Family Members

An Immediate Family Member or Close Family Mymber of a Partner or Professional staff member may be a director or officer of an Audit Client, or may have an accounting or financial reporting oversight role.

In such cases, the Partner or Professional Staff may be removed from the engagement team since providing services to the Audit Client where an Immediate Family Member or Close Family Member works may raise independence issues.
 

Application Systems for complying with laws and regulations of independence

Deloitte Tohmatsu Group uses the following internal systems to prevent any violations of independence rules.

What is DESC (Deloitte Entity Search and Compliance System)?

This is a system for searching for Audit Clients of the Deloitte Tohmatsu Group which require independence. Partners and Professional Staff of Deloitte Tohmatsu Group can use DESC to identify whether a particular company is as an Audit Client and applicable independence policies.

What is GIMS (Global Independence Monitoring System)?

This is a system in which Partners and Professional Staff of Deloitte Tohmatsu Group report accounts and financial instruments held by them and their Immediate Family Members.Partners and Professional Staff can use GIMS to confirm whether an account or financial instruments is relevant to an Audit Client. If the registered accounts or financial instruments become prohibited, an alert is automatically delivered.

Dear family members,

The cooperation of family members of Partners and Professional Staff is essential for Deloitte Tohmatsu Group to comply with the independence laws and regulations.

Before opening an account or trading financial instruments, please contact a Partner or Professional Staff to confirm whether it is permissible under the Deloitte Tohmatsu Group's independence policy.

In addition, after opening an account and acquiring financial instruments such as stocks, mutual funds, bonds, etc., they are required to be registered in GIMS immediately. It would be appreciated if you could share information with Partners or Professional Staff as appropriate to ensure that information registered in GIMS is always accurate, current and comprehensive.

Also please share information about other financial relationships, employment relationships and other relationships with Partner or Professional Staff as appropriate.

The information you provide will be strictly managed in accordance with the Group's policy and management rules regarding the protection of personal information.

Partners and Professional Staff can contact the independence consultation desk through the designated system.

If you have any questions about independence rules or procedures, please request a Partner or Professional Staff to contact the independence consultation desk on your behalf.
 

[Reference]

This video explains the independence policy of Deloitte Tohmatsu Group regarding financial relationships among personal independence.

Explore Content

Did you find this useful?
About Deloitte Tohmatsu Group and Deloitte global network

Our History