Mazda initiated a program of self-examination of internal controls in 1998, and this is currently carried out at all consolidated Group companies in Japan and around the world.
Departments primarily responsible for internal controls cooperate with other related departments to provide training and support, working to promote internal controls to ensure that operations proceed smoothly in all departments and consolidated Group companies.
Mazda has in place its own framework of internal controls conforming to the COSO Report,*1 a global framework for internal controls, and the implementation standards of J-SOX*2. This framework helps to ensure the validity of financial reports, the promotion of compliance, the improvement of operational efficiency, and the maintenance of corporate assets.
- The Mazda Corporate Ethics Code of Conduct
- The Mazda Corporate Ethics Code of Conduct asserts the importance of conducting fair and honest business activities, and serves as a benchmark for ethical conduct by directors and employees.
- The Company's basic philosophy: The Mazda Way
- The Mazda Way facilitates employee education by summarizing basic principles and values to which employees should adhere. Integrity is stipulated as one of the seven principles.
- Mazda Way
- Promotion of Self-Diagnosis Checklist on Internal Controls
- Development of a Self-Diagnosis Checklist on Internal Controls
The checklist was designed to analyze potential risks to bring together the necessary controls in a system of cross-checking, and provides for objective evaluation by independent dedicated staff. - Appointment of Dedicated Staff to Support Departments and Group
Companies
The staff addresses improvements to inadequacies found in the internal controls framework and those reported from outside the Company. - The staff provides support for deployment of the checklist at Group companies in Japan and overseas.
- Development of a Self-Diagnosis Checklist on Internal Controls
- Implementation of an Internal Controls Signoff System
- Have department managers and senior managers of Group companies sign off consecutively on internal controls.
- Status of measures to address inadequacy reports checked each quarter.
- Have the validity of internal controls reports guaranteed.
- Mazda Global Hotline
- The Mazda Global Hotline is a direct contact point for receiving information on inappropriate activities that violate laws or the Corporate Ethics Code of Conduct. In addition, Mazda has a variety of other contact points providing consultation on human rights, labor issues, and other concerns.
- Auditing Framework
- Mazda has instituted a global auditing framework with regard to operations at the head office and each of the major regions in Europe, the United States, Australia, etc. (Includes 18 officially certified auditors)
- A dedicated auditing sector is in place at major dealers in Japan, performing audits of sales outlets and other duties.
- Enhancement of IT Security
- Standardized administrative rules are formulated to address IT risks (at Group companies in Japan and overseas).
- Dedicated and publicly certified IT auditors are appointed.
- *1Report outlining a comprehensive framework for internal controls, released by the US organization, Committee of Sponsoring Organizations of the Treadway Commission (COSO)
- *2The Japanese version of the Sarbanes-Oxley Act (original Sarbanes-Oxley Act is a US federal law)
Located at the Mazda Head Office, the Global Auditing Department conducts internal audits to ensure that the Company's management targets, policies, and plans comply with all applicable laws and regulations, and uphold the Company's sound and efficient management. In addition, in overseas Group companies in North America, Europe, Australia, and major operational centers in South America, the Group has established internal auditing departments that are fully independent from the operating departments. These departments work closely with the Global Auditing Department to conduct a full range of auditing tasks, including internal control evaluations. Among Group companies in Japan, dedicated internal auditing departments are established at major dealerships, where they are chiefly engaged in the auditing of sales outlets.
These internal auditing departments are staffed with many auditing professionals of the highest caliber, bearing qualifications such as Certified Internal Auditor (CIA) and Certified Information System Auditor (CISA). The Company is also actively engaged in training the next generation of high-quality auditors. As of March 31, 2011, ten internal auditors in Mazda itself and eight in overseas subsidiaries hold qualifications.
