Abstract
The Financial Instruments and Exchange Law (aka the Investment Services Law) came into being on June 7, 2006. It obliges all companies listed in Japan to submit an Internal Control Report that evaluates the internal controls they use to ensure the adequacy of financial statements. The Business Accounting Council's Internal Controls Subcommittee's report "On the Direction of Standards for Evaluating and Auditing Internal Controls over Financial Reporting" enumerates four objectives of internal controls: the effectiveness and efficiency of the business; the reliability of financial reporting; the legal and regulatory compliance of business operations; and the integrity of assets. Companies are called upon to initiate an internal control project appoint an internal control project manager ("PM"), and go to all lengths to ensure that their appropriate and sound operations benefit society in necessary ways in the securest mannerpossible.