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Corporate Governance

Internal Control System

To Maintain and Improve the Transparency and Reliability of Financial Reporting

Society requires businesses to be transparent and reliable in their financial reporting. The Brother Group accommodates this request by maintaining and improving internal control, one of the significant infrastructures that support corporate management, and strives to continuously gain high trust from many stakeholders.

Aiming to maintain and improve internal control continuously, the Brother Group companies every year conduct self-inspections using a check list or other tools to examine whether their internal control systems are functioning effectively, and also carry out audits by their internal audit departments from an independent viewpoint.
When merging or acquiring other businesses, the Brother Group provides them with support in accordance with their scale and situations, which includes organizing a corporate structure capable of practicing regular self-assessment of internal control status and making improvements as necessary. In addition, the Brother Group is flexible to changes. For example, when the Group adopted International Financial Reporting Standards (IFRS) in FY2016, it revised its checking methods to meet the new standards.
For its employees, the Brother Group utilizes its intranet to share the purposes and significance of internal control as well as activities conducted within the Group, and also provides training and other opportunities for them to deepen their understanding of internal control.

Internal Control Framework

Internal Control Framework

Internal Audits

We conduct internal audits in the Brother Group companies in and outside Japan to ensure the PDCA cycle of internal control, to further enhance the transparency and efficiency of business activities, and to reinforce our ability to control risks. Brother Industries, Ltd. (BIL) works with internal audit departments in regional representative companies for the Americas, Europe, and Asia and carries out audits tailored to the reality of each organization.
In addition, the regional representative companies and BIL's Internal Audit Dept., Finance & Accounting Dept., and MIS Dept. hold regular meetings to further strengthen the internal auditing function of the Brother Group.

Aiming to achieve the Mid-Term Business Strategy "CS B2018," we are committed to three transformations: Business, Operational, and Talent transformations, and maintain and improve the internal control function of the whole Brother Group by: (i) establishing internal control systems more suitable to the Group, (ii) making the PDCA cycle for internal control at respective departments self-sustaining, and (iii) increasing audit efficiency by cooperating and sharing information among auditing departments in the Group.

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