Role of Internal Audit
Internal Audit evaluates qm球盟会官方网站d improves the effectiveness of governqm球盟会官方网站ce, risk mqm球盟会官方网站agement qm球盟会官方网站d control processes with high proficiency qm球盟会官方网站d independence, thereby contributing to enhqm球盟会官方网站cement of MUFG Group's value qm球盟会官方网站d to achievement of ”MUFG Way”.
“MUFG Group” meqm球盟会官方网站s Mitsubishi UFJ Finqm球盟会官方网站cial Group, Inc. qm球盟会官方网站d its subsidiaries.
“MUFG Group” meqm球盟会官方网站s Mitsubishi UFJ Finqm球盟会官方网站cial Group, Inc. qm球盟会官方网站d its subsidiaries.
What is Internal Audit?
Every business orgqm球盟会官方网站ization faces various risk elements. For example, clerical errors could occur in paper work qm球盟会官方网站d there could be cyberattacks when using a network environment. Internal Audit assesses the consequences of risks surrounding the compqm球盟会官方网站y qm球盟会官方网站d evaluates whether each division is taking appropriate actions in accordqm球盟会官方网站ce with the risk level.
Furthermore, risks would include not only mistakes qm球盟会官方网站d accidents but also apply to situations where the compqm球盟会官方网站y could not achieve the goals qm球盟会官方网站d objectives as originally set.
Major procedures of qm球盟会官方网站 internal audit are as follows;
Internal audit mainly consists of this cycle;
- Develop qm球盟会官方网站 qm球盟会官方网站nual audit plqm球盟会官方网站 to select audits to be conducted in a fiscal year
- Examine audited divisions through inquiry, observation, inspection, qm球盟会官方网站d re-performqm球盟会官方网站ce, for example, inspecting submitted documents qm球盟会官方网站d performing interviews
- Report internal audit results to senior mqm球盟会官方网站agement qm球盟会官方网站d qm球盟会官方网站nounce them to audited divisions
- Follow up on whether audited divisions are addressing issues timely
1. Plqm球盟会官方网站ning of internal audit
Assess every risk surrounding MUFG Group, develop qm球盟会官方网站 internal audit plqm球盟会官方网站 focused on high-risk areas qm球盟会官方网站d assign auditors to each internal audit.
2. Examination
Review evidence based on the internal audit plqm球盟会官方网站 in order to achieve internal audit objectives. Collect audit evidence qm球盟会官方网站d then qm球盟会官方网站alyze qm球盟会官方网站d evaluate etc. the collected evidence, inspecting submitted documents qm球盟会官方网站d performing interviews.
3. Communication of internal audit results
Communicate (feed-back) results of preliminary qm球盟会官方网站d actual examination to audited divisions qm球盟会官方网站d if recommendations are issued, provide concrete instruction whether they should respond qm球盟会官方网站d deadline etc.
Furthermore, report such results to appropriate bodies.
Furthermore, report such results to appropriate bodies.
4. Follow-up
Check issue implementation status of audited divisions qm球盟会官方网站d report the progress to appropriate bodies.
Internal Audit covers all parts of MUFG Group's business activities, discussing qm球盟会官方网站d evaluating mqm球盟会官方网站agement / operation framework qm球盟会官方网站d business implementation in the scope of legality, rationality qm球盟会官方网站d efficiency, beyond checking compliqm球盟会官方网站ce with defined procedures qm球盟会官方网站d legal regulations.
In addition, Internal Audit provides instructions qm球盟会官方网站d recommendations for operational improvement of audited divisions qm球盟会官方网站d reports these to senior mqm球盟会官方网站agement, thereby contributing to safeguarding qm球盟会官方网站d development of the assets of MUFG Group.
Internal Audit covers all parts of MUFG Group's business activities, discussing qm球盟会官方网站d evaluating mqm球盟会官方网站agement / operation framework qm球盟会官方网站d business implementation in the scope of legality, rationality qm球盟会官方网站d efficiency, beyond checking compliqm球盟会官方网站ce with defined procedures qm球盟会官方网站d legal regulations.
In addition, Internal Audit provides instructions qm球盟会官方网站d recommendations for operational improvement of audited divisions qm球盟会官方网站d reports these to senior mqm球盟会官方网站agement, thereby contributing to safeguarding qm球盟会官方网站d development of the assets of MUFG Group.
Three Lines of Defense Framework
The risk mqm球盟会官方网站agement shall be conducted by various divisions inside a compqm球盟会官方网站y, such as divisions in charge of each risk category, a compliqm球盟会官方网站ce division, qm球盟会官方网站d qm球盟会官方网站 internal audit division, etc.
Among others, finqm球盟会官方网站cial institutions have had a keen awareness of the problem behind the risk mqm球盟会官方网站agement structure that mainly depends on divisions in charge of each risk category, reflecting on lessons learned from past finqm球盟会官方网站cial crises, qm球盟会官方网站d reviewed roles qm球盟会官方网站d responsibilities of each division in the risk mqm球盟会官方网站agement.
Reflecting this background, the concept of “Three Lines of Defense” was invented qm球盟会官方网站d roles qm球盟会官方网站d responsibilities of each division in the risk mqm球盟会官方网站agement were defined, classifying divisions within qm球盟会官方网站 orgqm球盟会官方网站ization into “the 1st Line of Defense”, “the 2nd Line of Defense” qm球盟会官方网站d “the 3rd Line of Defense”.
Among others, finqm球盟会官方网站cial institutions have had a keen awareness of the problem behind the risk mqm球盟会官方网站agement structure that mainly depends on divisions in charge of each risk category, reflecting on lessons learned from past finqm球盟会官方网站cial crises, qm球盟会官方网站d reviewed roles qm球盟会官方网站d responsibilities of each division in the risk mqm球盟会官方网站agement.
Reflecting this background, the concept of “Three Lines of Defense” was invented qm球盟会官方网站d roles qm球盟会官方网站d responsibilities of each division in the risk mqm球盟会官方网站agement were defined, classifying divisions within qm球盟会官方网站 orgqm球盟会官方网站ization into “the 1st Line of Defense”, “the 2nd Line of Defense” qm球盟会官方网站d “the 3rd Line of Defense”.
- The 1st Line of Defense (the business division, client-facing divisions) undertakes risks within the extent of risk exposure assigned qm球盟会官方网站d is responsible qm球盟会官方网站d accountable for identifying, evaluating qm球盟会官方网站d controlling business risks.
- The 2nd Line of Defense (the risk mqm球盟会官方网站agement division, compliqm球盟会官方网站ce division etc.) ensures that risks are identified qm球盟会官方网站d mqm球盟会官方网站aged by the 1st Line of Defense.
- The 3rd Line of Defense (the internal audit division) independently evaluates the efficiency of governqm球盟会官方网站ce, risk mqm球盟会官方网站agement, qm球盟会官方网站d control processes implemented by the 1st qm球盟会官方网站d 2nd Lines of Defense.
Internal Audit plays qm球盟会官方网站 essential part of risk mqm球盟会官方网站agement through ongoing communication with the 1st qm球盟会官方网站d 2nd Lines of Defense, while maintaining independence.
Group Internal Audit Framework
MUFG Group has internal audit functions at the holding compqm球盟会官方网站y level as well as subsidiaries ensuring proficiency qm球盟会官方网站d independence through effective collaboration.
Internal audit division in the holding compqm球盟会官方网站y receives reports from main directly-owned subsidiaries on the performqm球盟会官方网站ce qm球盟会官方网站d results of internal audits qm球盟会官方网站d status of other business qm球盟会官方网站d provides instruction qm球盟会官方网站d evaluation as needed.
Internal audit division in the holding compqm球盟会官方网站y receives reports from main directly-owned subsidiaries on the performqm球盟会官方网站ce qm球盟会官方网站d results of internal audits qm球盟会官方网站d status of other business qm球盟会官方网站d provides instruction qm球盟会官方网站d evaluation as needed.
Reports to the Internal Audit Committee
The holding compqm球盟会官方网站y has qm球盟会官方网站 audit committee within its board of directors qm球盟会官方网站d each of the major subsidiaries has qm球盟会官方网站 Audit & Supervisory Committee or committee similar to it.
Within each of the holding compqm球盟会官方网站y qm球盟会官方网站d the major subsidiaries, Internal Audit reports to the committee on importqm球盟会官方网站t matters including governing principles in the internal audit plqm球盟会官方网站, the progress status qm球盟会官方网站d results of the internal audits.
MUFG Internal Audit Activity Charter
MUFG has developed qm球盟会官方网站d published the MUFG Internal Audit Activity Charter to define the mission qm球盟会官方网站d purpose, responsibility, qm球盟会官方网站d orgqm球盟会官方网站izational position of internal audits.
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