Certified Japanese Sarbanes Oxley Expert (CJSOXE), distance learning and online certification program

Overview

J-SOX is the unofficial term that refers primarily to Japan’s Financial Instruments and Exchange Law, and the guidelines that followed. Japanese and foreign companies listed in Japan are required to prepare and submit internal control reports on a consolidated basis.

The reach of J-SOX extends to subsidiaries outside Japan (in the USA and Europe for example), because the provisions apply to the company as a whole. The subsidiaries outside Japan are involved in the testing and documentation of internal processes and controls.

Objectives

The program has been designed to provide with the knowledge and skills needed to understand and support compliance with the Japanese Financial Instruments and Exchange Law and the guidelines that followed, and to become a Certified Japanese Sarbanes Oxley Expert (CJSOXE).

Target Audience

This course is highly recommended for managers, employees and consultants working for firms listed in Japan, especially those involved in the design and implementation of strategies, policies, procedures, risk assessments, control activities, testing, documentation, monitoring and reporting.

This course is also recommended for risk and compliance managers and employees working for international conglomerates.

Course Synopsis.

Introduction.
The CJSOXE exam.

Part 1: What is J-SOX?

The Financial Instruments and Exchange Act (FIEA).
The FIEA’s objectives.
Kanebo.
Livedoor.
Sarbanes-Oxley (SOX) and J-SOX.

FSA, SESC, CPAAOB.
The Financial Services Agency (FSA).
The Securities and Exchange Surveillance Commission (SESC).
The Certified Public Accountants and Auditing Oversight Board (CPAAOB).

Part 2: SOX vs. J-SOX.

FSA, Eleven Misunderstandings about the Internal Control Report System.
1. Is the Internal Control Report System identical to the one originally introduced by the Sarbanes-Oxley (SOX) Act in the United States?
2. Is additional documentation always necessary?
3. Do all business operations require internal controls?
4. Do even small and medium-sized companies need internal controls as required for large companies?
5. Is a company subject to punishments, if any deficiencies are found?
6. Does a management always need to comply with suggestions from its auditors or consultants?
7. Will auditing costs be doubled?
8. Is an unlisted company also required to design internal controls, when entering into transactions with listed companies?
9. Is the absence of a project team a problem?
10. Does a company need to finish the whole preparation by the effective date?
11. Does a company need to postpone modifications to an IT system scheduled around the end of a fiscal year?

Part 3: FSA, Corporate Governance Reforms.

General Principles of Japan’s Corporate Governance Code.
a. Securing the Rights and Equal Treatment of Shareholders.
b. Appropriate Cooperation with Stakeholders Other Than Shareholders.
c. Ensuring Appropriate Information Disclosure and Transparency.
d. Responsibilities of the Board.
e. Dialogue with Shareholders.

Japan’s Stewardship Code.
The principles of Japan’s Stewardship Code.

Part 4: The Financial Instruments and Exchange Act (FIEA) - Important sections.

Article 24-4-2, Submission of Confirmation Letter for Annual Securities Report. (Note: It is similar to SOX Section 302).
Article 24-4-4, System for Ensuring Appropriateness of Statements on Finance and Accounting and Other Information. (Note: It is similar to SOX Section 404).

FAQ on Financial Instruments and Exchange Act, July 2015, Financial Services Agency, Japan - Important questions.

Why was the Internal Control Report system introduced?
What are the details of the Internal Control Report system, and from when is it applied?
Are foreign companies also obligated to submit an Internal Control Report?
What are the standards for assessment and audit of the internal control over financial reporting?
What was the background behind the establishment of the standards and practice standards for assessment and audit concerning internal control over financial reporting?
What points should be kept in mind when operating the standards and practice standards for assessment and audit concerning internal control over financial reporting?
What is the scope of "internal control over financial reporting"?
How does the Japanese Internal Control Report system differ from the Internal Control Report system pertaining to financial reporting that was introduced in the United States by the Sarbanes–Oxley Act of 2002?
Are there penal provisions against those who violate provisions of Internal Control Reports?
Why was the Confirmation Letter system introduced concerning the contents of Annual Securities Reports, etc.?
What kind of system is the Confirmation Letter system?
Which companies are obligated to submit Confirmation Letters?
Are foreign companies also obligated to submit Confirmation Letters?
What kinds of disclosure documents require submission of a Confirmation Letter?
Which members of the management need to include their titles and names in the Confirmation Letter?

I. Basic Framework of Internal Control.
II. Assessment and Report on Internal Control Over Financial Reporting.
III. Audit on Internal Control Over Financial Reporting.

Basic framework of internal control.
Four objectives:
(i) effectiveness and efficiency of business operations,
(ii) reliability of financial reporting,
(iii) compliance with applicable laws and regulations relevant to business activities, and
(iv) safeguard of assets.

Six basic components:
(i) control environment,
(ii) risk assessment and response,
(iii) control activities,
(iv) information and communication,
(v) monitoring, and
(vi) response to IT.

FSA Statement, following the enactment of the Bill for Amendment of the Financial Instruments and Exchange Act, etc.
Case Study.

Part 5: Council Opinions.

On the Setting of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions).

Part 6: Practical Guidance.

Part 6: Practical Guidance for Audits of Internal Control over Financial Reporting (October 2007), from the Japanese Institute of Certified Public Accountants.

The intention of internal control audits.
(1) The objectives of internal control audits.
(2) The characteristics of the audit approach.
(3) The subject of internal control audits.

The relationship between the Financial Statement Audit and the Internal Control Audit.
(1) The combination of Financial Statement Audits with Internal Control Audits.
(2) Issues on using results of internal control audits in financial statement audits.
(3) Understanding management’s assessment of internal controls and audit planning.
(4) Procedures for evaluating assessment of the design/operation of internal controls.

The relationship between the Financial Statement Audit and the Internal Control Audit.
(1) The combination of Financial Statement Audits with Internal Control Audits.
(2) Issues on using results of internal control audits in financial statement audits.
(3) Understanding management’s assessment of internal controls and audit planning.
(4) Procedures for evaluating assessment of the design/operation of internal controls.
(5) Evaluation of the assessment of company-level controls and the period-end financial reporting process.
(6) The relationship between audit procedures for internal control audits and those for internal controls in financial statement audits.
(7) Impact of results of internal control audits on financial statement audits.
(8) The impact of the results of financial statement audits on internal control audits.
(9) Company Law audits and internal control audits.

Evaluation of the assessment of IT general control.
(1) Positioning of IT general control.
(2) Evaluation of the assessment of the IT general control.
(3) Evaluation of deficiencies in IT general control.

Material weakness in internal controls.
(1) Deficiencies in internal controls.
(2) Guidelines for determining material weakness.
(3) Control deficiencies for which examination is necessary to determine whether they constitute material weakness.
(4) In the case that there are multiple control deficiencies.
(5) Response in case management has identified a material weakness.
(6) Reporting and remediation of material weakness.
(7) Influences on the financial statement audit.

Case Study.
Closing.


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