Internal Audits

Internal Audit Promotion

In order to maintain the independence of internal auditing divisions and implement effective and efficient auditing, the AGC Group has set up a framework that assigns the internal audit global leader (IA Global Leader) under the supervision of the Group CEO to oversee the regional leaders of Asia including Japan, Europe and North America. Under this system, each regional auditing division monitors their respective organization and works to make improvements. The IA Global Leader promptly reports on results to the Group CEO, and periodically submits reports to the Corporate Auditors and the Board of Directors.

The Group gives global priority to certain audit items. In 2015, 52 audits were conducted globally covering three priority items: systems and mechanisms for complying with antitrust law, measures for preventing leaks of important confidential information, and measures for preventing bribery and corruption. In 2016, the Group plans to add “data authenticity assurance” for a total of four priority items, and will focus on all four when implementing audits. In addition, standards have been established for use in auditor selection.

Theme audits, which target set themes, are also implemented across Group companies in Asia including Japan and the European regions. In 2015, theme audits of handling risks related to new product and technology imitations were implemented for Asia including Japan, and audits of risks related to outsourcing were implemented in Europe. In 2016, the common theme of “Design & operational effectiveness for establishing communication and consulting routes in the case of compliance infringement disclosure (including function of whistle blower system)” has been set for Asia including Japan and the European regions, and audits are planned accordingly.

The AGC Group also performs pre-operation/mergers and acquisitions (M&As) audits that examine the internal control conditions of newly incorporated companies and those entities newly joined the Group through M&As. Most recently, in 2015, a pre-operation audit took place at a new corporate location in Mexico, and M&A audits were held at companies acquired in Japan.

Internal Audit System Structure

Internal Audit System Structure

Implementation of EHSQ Audits

In order to manage the progress of Environment, Occupational Health & Safety and Quality (EHSQ) activities in each business division, the AGC Group continuously implements internal audits in each business division, and applies the results to make improvements. In addition, the Corporate Division and Group Internal Audit Division implements audits focused on Group companies according to risk with the goal of ensuring that each business division thoroughly executes the Plan-Do-Check-Act (PDCA) cycle, and of correcting variations of activity and management levels among divisions. Major risks are reported to the Group CEO.

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