Services

Evaluation of Soundeness in Governance

When any fraud is uncovered in a company, the background to the fraud, factors causing the fraud, and other elements should be unveiled through fraud investigations by internal and external investigation committees. The company is also required to take a variety of corrective and preventive measures. In evaluation of soundness in governance, we will check whether the preventive measures formulated by the company are exhaustive enough to support the sound governance system, as well as their smooth progress, by using our governance evaluation tools and various methodologies related to corporate governance.

External Evaluation for Preventive Measures Introduced After the Detection of Fraud

Due to drastically changing business surroundings such as globalization of business, business expansion via M&A and diversifying operations, frauds and misconducts (hereinafter “frauds”) have been unveiled one after another. In response to the globalization of business, frauds have occurred both in domestic and overseas group companies in different ways. It is getting more and more difficult for companies to completely prevent such potential risks even with their measures taken properly. 

When any fraud comes to light in a company, the background to the fraud, factors causing the fraud, and other elements should be disclosed through fraud investigations by internal and external investigation committees. The company is also required to take a variety of corrective and preventive measures. And the company needs to plan and formulate effective measures so as to prevent similar frauds from recurring.

Meeting the Needs of Stakeholders

In recent years when the significance of compliance has been increasing, companies need to fulfill accountability to their various stakeholders further than before. The scope of the accountability to such stakeholders often becomes extensive, requiring the company to submit improvement or improvement situation reports about progress in taking preventive measures, in addition to disclosure of the outcomes of fraud investigations.

Deloitte Japan will support the company in responding to the requests from its stakeholders by providing services related to evaluation of soundness in governance from a third-party viewpoint. The services include development of soundness in the corporate governance system (business administration systems (organizations, reporting lines, etc.)), establishment of principles, rules,  manuals and others, verification and review, and determination of effectiveness in employee training (degrees of settlement and penetration, etc.). 

Preventive Measures Introduced After the Detection of Fraud by the Company

Services to Evaluate Soundness in Governance

To evaluate the soundness in governance, we will check whether the preventive measures formulated by the company are exhaustive enough to build up a sound governance system, as well as their smooth progress, by using our governance evaluation tools and various methodologies related to corporate governance.    

Major Processes to Evaluate the Soundness in Governance

• Checking whether specific tasks are sufficiently formulated for each preventive measure from perspectives unique to Deloitte Japan, while presenting challenges and additional measures as appropriate.
• Evaluating progress to verify whether each preventive measure is proceeding properly by establishing the criteria to complete specific tasks (definitions of deliverables submitted in completing the task, etc.)
• Evaluating each preventive measure and specific task comprehensively by taking their adequacy and progress into account.

Upon request of the headquarters of a group, a main financing bank or a business partner, as well as the company suffering a fraud, we will also conduct the soundness evaluation about progress of the preventive measures introduced by the company from a third-party standpoint.

Deloitte Governance Framework