Internal Audit
The Role of Internal Audit The boards of Bank of Tokyo-Mitsubishi UFJ,
Internal audit functions within MUFG seek to pro- Mitsubishi UFJ Trust and Banking and Mitsubishi
vide independent verification of the adequacy and UFJ Securities have also formulated separate inter-
effectiveness of internal control systems. This nal audit policies consistent with MUFG’s Internal
includes monitoring the status of risk manage- Audit Policy. This arrangement ensures that a
ment and compliance systems, which are critical consistent and integrated internal audit frame-
to the maintenance of sound and appropriate work applies to all MUFG operations, including
business operations. Internal audit results are subsidiaries of the major group subsidiaries.
reported to senior management. An additional In addition to having primary responsibility for
role for internal audit is to make suggestions to initiating and preparing plans and proposals relat-
help improve or rectify any issues or specific prob- ed to internal audits of the entire group, the
lems that are identified. Internal Audit Division at the holding company
monitors, and as necessary, guides, advises and
Group Internal Audit Framework
administers the internal audit divisions of sub-
The Board of Directors at the holding company
sidiaries and affiliated companies. The internal
level has instituted MUFG’s Internal Audit Policy to
audit divisions within the major subsidiaries con-
define the mission, goals, function and organiza-
duct audits of the respective head office and
tional position of internal audit. Separate divisions
branch operations of these companies. In addi-
have been created within the holding company
tion, each of these three divisions undertakes
and the major group subsidiaries to conduct inter-
direct audits of their respective subsidiaries, and
nal audits based on this policy (called the Internal
monitors and oversees the separate internal audit
Audit Division at the holding company, the
functions established within them. This helps to
Internal Audit & Credit Examination Division at
evaluate and verify the adequacy and effective-
Bank of Tokyo-Mitsubishi UFJ and the Audit
ness of internal controls within the MUFG group
Division at Mitsubishi UFJ Trust and Banking, and
on a consolidated basis.
the Internal Audit Division and Inspections Division
at Mitsubishi UFJ Securities). These divisions per- Implementing Efficient and Effective Internal
form the core internal audit functions of the Audits
group. Through close cooperation and collabora- To ensure that internal audit processes use avail-
tion between the divisions in each of the four able resources with optimal efficiency and effec-
companies, the internal audit divisions provide tiveness, the internal audit divisions implement
coverage for the entire group and also support the risk-focused internal audits in which the nature
Board of Directors at the holding company to and magnitude of the associated risks are consid-
monitor and oversee all MUFG operations. ered in determining audit priorities and the
54 Corporate Review 2006 Mitsubishi UFJ Financial Group
frequency and depth of internal audit activities. Trust and Banking and Mitsubishi UFJ Securities
The internal audit divisions ensure that audit per- have established Internal Audit and Compliance
sonnel attend key meetings, collect important Committees that are chaired by external directors.
internal control documents, and access databases These committees receive direct reports from the
to facilitate efficient off-site monitoring. internal audit divisions on important internal
audit-related matters, including the results of all
Measures to Enhance Internal Audit
internal audits and internal auditing plans requir-
Independence and Supervision by the Boards
ing board approval. The deliberations of the audit
of Directors
committees concerning such matters are then
To strengthen the respective boards of directors’
reported to the respective boards of directors.
monitoring and supervision of operational execu-
This structure enhances the independence of
tion status and to enhance the independence of
internal audit functions from functions responsi-
the internal audit divisions, the holding company,
ble for business execution.
Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ
Internal Audit
Holding Company (MUFG)
Board of Directors Internal Audit and Compliance Committee
(Chairman of the board) (Committee chairman: Outside director)
Executive Committee
(Head: President) Deliberation
and report
Audit Report
Each MUFG Division Internal Audit Division
Board of Directors Internal Audit and Compliance Committee
(Chairman of the board) (Committee chairman: Outside director)
Pre-event
discussion Planning
Post-event Monitoring
Executive Committee, etc. Deliberation report Cooperation
(Head: President) and report Cooperation
Audit
Each headquarters division and Internal Audit Division
branch office, etc. (Internal Audit Division and Inspections Division
at Mitsubishi UFJ Securities )
Bank of Tokyo-Mitsubishi UFJ/Mitsubishi UFJ Trust and Banking/Mitsubishi UFJ Securities
Mitsubishi UFJ Financial Group Corporate Review 2006 55