Transparency Report 2017 1

23.974Transparency mm Report 2017 2017 9 ______年月 www.kpmg.com/jp/azsa © 2017 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Transparency Report 2017 1 1. Message from the Local Senior Partner As a member of the KPMG network,KPMG AZSA LLC shares a common Purpose-to Inspire Confidence,Empower Change–with member firms around the globe.Based on this Purpose,we aim to establish the reliability of information through auditing and accounting services and support the change of companies and society towards sustainable growth. KPMG AZSA's system of quality control is in line with the KPMG Audit Quality Framework applicable to KPMG network firms globally.This Transparency Report 2017 explains our quality control system in performing audit,based on the framework,and the systems of quality control for each of the key drivers and KPMG network arrangements.We also published AZSA Quality 2017 in September 2017 to address mainly our recent efforts regarding quality control that serves as the basis for KPMG AZSA’s Audit Quality,governance structure and policies of human resource development. 2. Network arrangements As a member firm of KPMG International,KPMG AZSA LLC provides clients with a consistent set of professional services globally through a network in 155 countries.KPMG network arrangements,including legal structure,responsibilities and obligations of member firm are described more detail in the following sections of this report. 2.1 Legal Structure the Global Board and consistently applied to the member firms.A The independent member firms of the KPMG network are affiliated firm’s status as a KPMG member firm and its participation in the with KPMG International,a Swiss cooperative which is a legal entity KPMG network may be terminated if,among other things,it has not formed under Swiss law. complied with the policies and regulations set by KPMG KPMG International carries on business activities for the overall International or any of its other obligations owed to KPMG benefit of the KPMG network of member firms but does not provide International. professional services to clients.Professional services to clients are exclusively provided by member firms. 2.3 Professional Indemnity Insurance A substantial level of insurance cover is maintained in respect of One of the main purposes of KPMG International is to facilitate the professional negligence claims.The cover provides a territorial provision by member firms of high quality Audit and Advisory coverage on a worldwide basis and is principally written through a services to their clients.For example,KPMG International establishes mutual that is available to all KPMG member firms. and facilitates the implementation and maintenance of uniform policies,standards of work and conduct by member firms, 2.4 Governance structure and protects and enhances the use of the KPMG name and brand. The key governance and management bodies of KPMG International are the Global Council,the Global Board,and the Global Management KPMG International is an entity that is legally separate from each Tea m. member firm.KPMG International and the member firms are not a global partnership,joint venture,or in a principal or agent relationship Global Council or partnership with each other.No member firm has any authority to The Global Council focuses on high-level governance tasks and obligate or bind KPMG International or any other member firm vis-à- provides a forum for open discussion and communication among vis third parties,nor does KPMG International have any such member firms.It performs functions equivalent to a shareholders’ authority to obligate or bind any member firm. meeting (albeit KPMG International has no share capital and, therefore,only has members,not shareholders). 2.2 Responsibilities and obligations of member firms Among other things, the Global Council elects the Global Chairman Under agreements with KPMG International,member firms are and also approves the appointment of Global Board members.It required to comply with KPMG International’s policies and includes representation from 58 member firms that are“members” regulations including quality standards governing how they operate of KPMG International as a matter of Swiss law.Sub-licensees are and how they provide services to clients to compete effectively.This generally indirectly represented by a member. includes having a firm structure that ensures continuity and stability and being able to adopt global strategies,share resources (incoming Global Board and outgoing),service multi-national clients,manage risk,and deploy The Global Board is the principal governance and oversight body of global methodologies and tools. KPMG International.The key responsibilities of the Global Board Each member firm takes responsibility for its management and the include approving strategy,protecting and enhancing the KPMG quality of its work.Member firms commit to a common set of KPMG brand,overseeing management of KPMG International,and approving values. policies and regulations.It also admits member firms and ratifies the KPMG International’s activities are funded by amounts paid by Global Chairman’s appointment of the Global Deputy Chairman. member firms.The basis for calculating such amounts is approved by © 2017 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Transparency Report 2017 2 The Global Board includes the Global Chairman,the Global Deputy • establish and communicate appropriate audit and quality/risk Chairman,the Chairman of each of the three regions (the Americas; management policies; Asia Pacific (ASPAC); and Europe,the Middle East,and Africa (EMA)) • enable effective and efficient risk processes to promote audit and a number of senior partners of member firms. quality; and It is led by the Global Chairman,who is supported by the Executive • proactively identify and mitigate critical risks to the network. Committee,consisting of the Global Chairman,the Global Deputy Chairman,the Chairman of each of the regions and currently four The Global Steering Groups act under the oversight of the Global other senior partners of member firms.The list of Global Board Management Team. members,as at 1 October 2016 is available in the International The roles of the Global Audit Steering Group and the Global Quality Annual Review. & Risk Management Steering Group are detailed in the KPMG One of the other Global Board members is elected as the lead International Transparency Report. director by those Global Board members who are not also members Each member firm is part of one of three regions (the Americas, of the Executive Committee of the Global Board (“non-executive” ASPAC,and EMA).Each region has a Regional Board comprising a members).A key role of the lead director is to act as liaison between regional chairman,regional chief operating or executive the Global Chairman and the“non-executive”Global Board members. officer,representation from any sub-regions,and other members as appropriate.Each Regional Board focuses specifically on the needs Global Management Team of member firms within their region and assists in the The Global Board has delegated certain responsibilities to the Global implementation of KPMG International’s policies and processes Management Team.These responsibilities include developing global within the region. strategy by working together with the Executive Committee.The Further details about KPMG International including the governance Global Management Team also supports the member firms in their arrangements,can be found in KPMG International Transparency execution of the global strategy and is responsible for holding them Report,which is available at accountable for commitments.It is led by the Global Deputy http://www.kpmg.com/global/en/about/governance/pages/transparen Chairman and includes the Global Chairman,the Global Chief cy-report.aspx Operating Officer,global function and infrastructure heads,and the General Counsel.The list of Global Management Team members as 2.5 Area Quality & Risk Management Leaders at 1October 2016 is available in the International Annual Review. The Global Vice Chair—Quality,Risk and Regulatory appoints Area Quality & Risk Management Leaders who: Global Steering Groups The Global Steering Groups work closely with regional and member • assess the effectiveness of a member firm’s quality and risk firm leadership to: management efforts to identify and mitigate significant risks to the member firm and network,actively monitor alignment with global quality and risk management strategies and priorities; • share leading best practices in quality and risk management; and • report to Global Vice Chair–Quality,Risk and Regulatory. 3. Our system of quality control in line e with the KPMG Audit Quality Framework ■Overview These policies and associated procedures are designed to guide KPMG AZSA implements KPMG International policies and member firms in complying with relevant professional procedures and adopts additional policies and procedures that are standards,regulatory and legal requirements,and in issuing reports designed

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