Internal audit outsourcing services in Japan:
Professional assurance by experienced, qualified Japanese CPAs/CIAs
Meeting ever-increasing audit requirements can be challenging.
Outsourcing internal audit buys your team the time to focus on business-critical issues
and allows for optimal resource allocation.
Internal Audit Outsourcing
Quality internal audit can identify risk at early stages. It is the key to effective fraud prevention and the foundation for continued business growth.
Agreed-Upon Procedures (AUP)
AUPs are highly flexible engagements in which the CPA will execute a procedure agreed in advance with the client and report back on the findings.
Business Consulting for Biotech Startups
Business planning and capital strategy advice, and IPO consulting for biotechnology startups. We provide continued support and encourage dialogue every step of the way.
Increased Need for High Quality Internal Audit Services in Japan
1. Growing number of fraud cases in overseas subsidiaries
Statistically, the risk of fraud is higher at entities further removed from headquarters. Not all fraud starts with malicious intent. But even with the aid of modern technology, maintaining effective controls over a geographically remote location remains a challenge. Recruiting good internal auditors in Japan is often difficult, and nurturing local talent that can provide the much-needed link between headquarters and overseas subsidiaries requires time, effort and money.
Overreliance on external auditors can also make an organization vulnerable. External auditors determine the depth of audit based on the importance of the entity in the group, often giving smaller subsidiaries low priority. This is the cause of much frustration among shareholders and clients, who depend on external audit reports to validate their trust in the organization. Enhancing the internal control function is an effective solution to address a gap in expectations that is difficult for external audit firms to resolve themselves.
2. Mounting pressure for better corporate governance in Japan
Once exposed, dealing with fraud is extremely difficult, especially given increased public scrutiny in recent years. Damaged trust, loss of face, plummeting shares, financial fines, independent
investigation committees, and perhaps the most severe consequence of all – deeply demoralized loyal employees who took pride in their work and identified themselves with the corporate
brand.
To eradicate fraudulent behavior, an organization must question its processes and remedy cultural traits that may breed such psychology. It is a long-term, strenuous process only possible with
expert insight and a team of talented, dedicated internal auditors committed to the task.
3. The unique challenge of auditing “internally”
Lifetime employment is much the norm in Japan, and internal audit staff are often introduced to the task as the result of an interdepartmental job rotation. Although they have the advantage of
understanding the workings of the company, not all employees are the right fit for the role, and an internal auditor may choose not to speak out against the organization for fear of jeopardizing
a lifelong career.
In addition to the dilemma of securing quality talent, corporate governance is a relatively new concept in Japan and the departments being audited are not always receptive, creating further
challenges for internal audit staff.
4. Rise in M&A activity
ith the Japanese economy in slow decline, companies are increasingly turning to M&A as a strategy to gain market share and ensure business succession. However, mergers must be managed with care, especially with regards to corporate culture. Failure to integrate may not be immediately evident after the merger, but cultures cannot be changed overnight. Over time, a negative undercurrent will breed miscommunication, making it increasingly difficult for management to control the organization and in the worst-case scenario, result in fraud or scandal. An effective internal audit can help prevent such issues before they arise.
The Benefits of Internal Audit Outsourcing
✓ Effective use of audit resources
Companies must face increasing audit requirements with limited budget and personnel. We help your team to focus on business-critical issues. Outsourcing may prove more cost efficient compared to an in-house audit.
✓ Budget control
An estimate on the hours needed (and cost) upfront will enable better control over your budget. Our preliminary consultation session ensures the quote is based on an accurate understanding of your situation, approach to internal audit, as well as the required standard of the engagement.
✓ Access to real-time expert advice on accounting, tax, audit, and best practices
Your internal audit team will receive support from fully qualified Japanese CPAs. Audit plans can be made with appropriate consideration to risk and fraudulent activity detected in a timely manner. We are dedicated professionals, and can assist your organization to take a proactive approach to internal audit.
Our Approach
Marunouchi Internal Audit Office will bring quality to your internal audit process by:
✓ Taking into account your situation and why you decided to consider outsourcing
✓ Offering in-depth consultation to understand your organization’s approach to internal audit
✓ Providing an internal audit solution catered to your problems
✓ Supplementing any gaps or vulnerabilities that are beyond the scope of external auditors
✓ Ensuring experienced, fully qualified Japanese CPAs/CIAs are onsite to support your team
✓ Contributing to employee development by offering expert guidance so your organization may benefit in the longer term
Fee Policy
1. Daily charge (7 hours per day)
We will assess the number of days required for the engagement depending on your situation, and provide a tailored solution based on a daily charge system.
Daily charges are commensurate to the Big 4 accounting firms.
Large audit firms will charge a team rate for senior auditors who are often not onsite. Our services guarantee a fully qualified Japanese CPA with 10+ years of experience will be onsite for the
entire engagement.
2. Actual cost estimate for any travel expenses and accommodation will be provided upfront in the quote.
Our Standard Process
- Free Consultation (average 2 sessions)
- Non-Disclosure Agreement
- Submission of Quote
- Signing of Audit Agreement
- Audit planning / Review of requested material
- Audit execution (we will use IT devices as specified by client company)
For inquiries or a consultation, please call:
TEL: +81-(0)3-5941-6282
Office Hours: 9:00-18:00 (Monday - Friday)