Updated on August 29, 2019
The Audit Committee conducts the audit of the performance of duties by Directors and Corporate Executive Officers pursuant to applicable laws and regulations, and the Charter of the Audit Committee established by the Board, through deliberation at Audit Committee meetings (held six times during the fiscal year ended March 31, 2019), activities of Audit Committee Members (for example, reviewing reports relating to the execution of duties by the Corporate Executive Officers and employees of Sony Corporation, or directors, statutory auditors and employees of major subsidiaries of Sony Group), and activities of the Audit Committee supporting personnel (the Audit Committee Aide).
In addition, the Audit Committee conducts the “organizational audit” in cooperation with divisions in charge of internal audit and divisions in charge of internal control of Sony Group. Through the process, the Audit Committee receives periodical reports from these divisions at the Audit Committee meetings or other meetings to be held from time to time, requests them to conduct necessary investigation, and receives reports on its process and result.
The Audit Committee also assesses the eligibility and the independence of the independent auditor and the adequacy of the audit by receiving the notice that the independent auditor provides regarding maintenance of systems to ensure the execution of its duties under the Quality Control Standard for Audit, pre-confirming the audit plan at the beginning of each fiscal year, pre-approving auditor compensation, and reviewing the report of the procedures, and the result of the audit, for the last fiscal year and interim periods including review of quarterly financial reports and evaluating their content.
Sony Corporation established a department in charge of internal audit, the Risk & Control Department, which coordinates closely with the internal audit departments of major subsidiaries around the world, and Sony Group Internal Audit Charter, and endeavors to maintain and enhance the internal audit structure of Sony Group in order to promote Sony Group's internal audit activities on a global basis. The Risk & Control Department and each internal audit department of major subsidiaries of Sony ("Internal Audit Department") play an important function in maintaining Sony Group's governance in order to strengthen Sony Group's management structure, promote efficiency of management, and maintain and avoid any loss of material assets, including Sony's brand image, by evaluating the effectiveness of the internal control system and risk management structure of Sony through independent and objective audit.
The Risk & Control Department and each Internal Audit Department conduct the internal audit of each department or subsidiary that they supervise, in accordance with the annual audit plan that is established based on the risk assessments conducted in the beginning of each fiscal year and any matters proposed by Sony's management or the Audit Committee. Each internal audit is conducted under the planned audit procedure. Afterward, each Internal Audit Department follows up until the completion of any improvement plan developed based on the audit result.
In order to ensure its independence, fairness and objectiveness, the appointment and dismissal of the head of the Risk & Control Department is subject to the prior approval of the Audit Committee. The appointment and dismissal of the person in charge of each Internal Audit Department also require the prior approval of the head of the Risk & Control Department.
The Internal Audit Departments of major subsidiaries are required to provide the Risk & Control Department with a report on the material items and a copy of the issued audit report, and the Risk & Control Department makes periodic presentations on such report to the Audit Committee, the CFO, and the Corporate Executive Officer in charge of internal audit. The Risk & Control Department also make periodic reports to the independent auditor on the status of the internal audit activities and the result of the audit. The audit report issued by the independent auditor is used for the planning of the internal audit and conducting the internal audit.
Sony's accounting audit is conducted by PricewaterhouseCoopers Aarata under an agreement. The certified public accountants who conducted the accounting audit of Sony for the fiscal year ended March 31, 2019, are as follows:
Hitoshi Kiuchi, Takaaki Ino and Masataka Kubota
The team at PricewaterhouseCoopers Aarata that conducted Sony's accounting audit is composed of 98 certified public accountants, 85 assistant certified public accountants and 205 other staff members.