IDEAS home Printed from
   My bibliography  Save this paper

Research Project on the Design for the Optimum Disclosure System Volume 3: The Status quo and Problems with the Internal Control Report System (Japanese)


  • HASHIMOTO Takashi
  • MATSUMOTO Yoshinao


The Internal Control Report System (herein after System) was introduced in Japan in the fiscal years beginning on or after April 1, 2008, and listed companies have therefore experienced three years of compliance reporting based on the new internal control reporting requirements. In this paper, we assess the implementation of the internal control requirements, wherein we show that the Japanese word used to match the English word "material weakness" causes an unnecessary burden. Thus far, considerable efforts have been made to improve the effectiveness and efficiency of the System. The Business Accounting Council is currently working on a review of the System in order to make mid-course corrections to the reporting and auditing components of an internal control over financial reporting. In December 2010, the BAC issued an exposure draft of the revised Standards and Practice Standards for Management Assessment and Audit concerning Internal Control over Financial Reporting, which proposed to give the listed companies, especially smaller companies, considerable flexibility in determining how to implement the internal control requirements. The exposure draft also proposes to change the aforementioned Japanese word that is used to match the English word "material weakness." With the age of IFRS near at hand, the revised standards are expected to enhance the effectiveness and efficiency of the System.

Suggested Citation

  • HASHIMOTO Takashi & MATSUMOTO Yoshinao, 2011. "Research Project on the Design for the Optimum Disclosure System Volume 3: The Status quo and Problems with the Internal Control Report System (Japanese)," Discussion Papers (Japanese) 11015, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:rdpsjp:11015

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:rdpsjp:11015. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (KUMAGAI, Akiko). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.