Governance
Basic stance and policy
We are strengthening internal controls based on the Basic Policy Concerning the Establishment of Internal Control, as resolved by the Board of Directors. Specifically, we implement activity policies through groupwide bodies such as the Business Ethics Committee and Risk Management Committee, in which major Group companies participate. Moreover, we ensure thorough awareness through informative guides and training programs and verify policy effectiveness firsthand at our worksites through audits conducted by our internal audit departments.
Promotion Structure
To guarantee the independence of our internal audits, our audit departments operate directly under the President. Our audit departments work on-site to assess the overall establishment and operation of our internal control processes, including the compliance of our operations with laws and regulation and the appropriateness of business management at the Company and its domestic and overseas subsidiaries. Audit findings are reported to the President, who is the Group’s top executive, and are also regularly reported to the Board of Directors and Audit & Supervisory Board, which provide oversight, so as to further strengthen governance. To enhance audit quality and effectiveness, we mutually share information and cooperate with our internal auditors and accounting auditors.
Key Initiatives
Based on the Company’s Internal Audit Rules” and annual audit plan, we conduct regular audits against group-wide audit standards. Additionally, we conduct internal audits based on key themes selected based on risk. Audit findings not only identify deficiencies but also present options for improvement from a fair and objective standpoint and provide verification of remedial action. Furthermore, to support improvement efforts within each department and Group company, we share audit findings and risk assessments with functional units related to internal control in such areas as legal, accounting, HR, and procurement. Through our internal audit process, we aim to maintain an organization in which each department and Group company autonomously implements the PDCA cycle for advancement, thereby strengthening our internal controls.
Thematic audits and audits of affiliates
We select audit themes using a risk-based approach and conduct audits targeting specific control frameworks for both Aisin and its Group companies. We also audit affiliated Group companies targeting the control frameworks for overall operations executing, on a four-year cycle, against the four specific areas of companywide internal controls, finance and accounts receivable/payable, information management, and labor safety and health, the environment, and quality. We propose improvement measures to the audited companies based on findings and enhance audit effectiveness by verifying improvement plans and progress. (In FY2025, the audit targets 73 companies.)
Audits based on the Financial Instruments and Exchange Act
Our audit process internally evaluates internal controls based on the Financial Services Agency's Implementation Standards for Evaluation and Audit of Internal Controls over Financial Reporting. Audit targets are selected from among the parent and Group companies based on their significance to the reliability of financial reporting and consultation with the audit firm. Every year, we evaluate all operations concerning internal controls across the enterprise, the closing process, sales, purchasing, and inventory management and other business activities, and IT controls. We also enhance effectiveness through written and face-to-face audits. As of FY2025, we determined that the internal controls over financial reporting for our Group were effective and submitted an internal control report in June of that year. Furthermore, the audit firm submitted an audit report stating that this assessment was accurate.