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Execution of regular internal audits
We perform internal audits at business establishment such as sales and service offices in Japan, and associated companies. The purpose of these internal audits is improving business operations and raising business results by clarifying the state of business operation management through audits that examine the accuracy, propriety and the rationality of the business operations. Our internal audits consist of the following four types.
1. Business operation instruction
This is an audit we perform at our associated companies within three years after becoming our associated companies. We confirm and instruct the basic matters of business procedures and management.
2. Internal control audit
This is an annual audit to examine the state of internal control system and the effectiveness of internal control.
3. Regular audit
This is an ordinary audit and comprises a management audit that examines the business procedures and management generally, and an internal control audit. We conduct regular audits at intervals of two and a half to three years.
4. Special audit
This is an audit we perform for specific risks as required.
In fiscal 2008, we conducted business operation instructions to five group companies including Takomu Manufacturing and Hitachi Construction Machinery (Malaysia) in addition to annual internal control audits. We also conducted regular audits at East Japan Division and at West Japan Division (now merged into Japan Division) and at five group companies including Hitachi Construction Machinery (Europe) and Okinawa Hitachi Construction Machinery. Audit detail in regular audits is wide- ranging covering safety, compliance, export management, information security, personal information protection, accounting, finance in addition to procurement, production, sales, service although it differ slightly according to the company. We performed regular audits at the head office (the division's main office) and at the branch offices. So Internal Auditing Office conducted them in a team setting over a period of several days. Auditing chief presents an audit review soon after the completion of the audit at the audited company in order to seek the early resolution of any problems revealed by the audit.
We conduct regular internal audits as mentioned above and continuously improve business operations and raise business results. In addition, we revised the Internal Audit Rule in fiscal 2008 to stipulate the role of our Internal Control Committee, so that the rule covers internal control.
