| Budget Amount *help |
¥2,000,000 (Direct Cost: ¥2,000,000)
Fiscal Year 2005: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2004: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2003: ¥800,000 (Direct Cost: ¥800,000)
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| Research Abstract |
This research's central objects are to declare some measures of establishing internal control system in publicly-held corporations that enhanced corporate governance with the respect to reporting process, whereas it could be support for the disclosure, accounting and auditing system under the federal securities laws. The failures of Enron and WorldCom triggered the new disclosure system under the federal securities laws which intended the management to improve the financial reporting system, and rapid and timely based decision-making system of management for the purpose of recovering reliability of securities markets.
The Sarbanes- Oxley Act of 2002 (the "SOA") created two separate certification requirements for CEO and CFO to ensure more effective internal control system. § 404 of the SOA requires the SEC to adopt rules requiring public companies to include an internal control report in Form 10-K. In the internal control report, the management must state their responsibilities for esta
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blishing "internal controls over financial reporting" and assess the effectiveness of those controls. In addition, the company's independent auditors must attest and report on this assessment. § 302 of the SOA and the SEC rules require the management to certify the fairness of financial reporting, and establish "the disclosures controls and procedures". It should be emphasized that the SEC adopted broader concept of the disclosure controls and procedures to ensure compliance with disclosure requirements generally because the concept is intended to address the quality and timeliness of the disclosure.
In addition to significant changes of internal controls, the SOA improved audit committee requirements to ensure the role of gatekeepers in corporate governance, such as internal auditors, independent auditors, lawyers, employees, and so on. If they would found anything with concerns to the internal control system, they would be required to inform the audit committee, then the members of audit committee will discuss with them, and ultimately, decide whether reasonable processes exist to evaluate the effectiveness of internal controls by the management who certified under § 302 of the SOA. Less
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