Internal Control

Internal Control

Fiscal 2022 Objectives Fiscal 2022 Achievements Self-Evaluation Priority Objectives for Fiscal 2023
  • Implement comprehensive design and operation of internal controls based on Basic Policy for Internal Control
  • Establish internal control systems for new consolidated subsidiaries (e.g., Sakai Display Products) and make a concentrated effort to resolve material issues (problems)
  • Implemented 55 measures based on the Basic Policy for Internal Control
  • Designed internal controls, evaluated their operation, and confirmed their improvement to handle material issues (problems) discovered at new consolidated subsidiaries (e.g., Sakai Display Products)
★★
  • Implement comprehensive design and operation of internal controls based on the Basic Policy for Internal Control
  • Assess the design and operation of internal controls focused on material issues (problems) discovered in each control domain
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

As a means of facilitating the effective functioning of corporate governance, Sharp has designed and operates an internal control system for ensuring the propriety of business activities across the entire Sharp Group based on the provisions of Japan’s Companies Act and of the Internal Control Report System, which falls under the Financial Instruments and Exchange Act.

Specifically, in order to establish Sharp’s basic approach to internal control, the Basic Policy for Internal Control was adopted by the Board of Directors. In accordance with this policy, Sharp also established the Internal Control Committee to serve as an advisory panel to the Board of Directors. The Internal Control Committee discusses various internal control system-related policy measures, while also affirming their design and operation, and, when necessary, carries out other duties, such as proposing revisions to the Basic Policy. Sharp also develops and maintains systems and structures, such as specialized departments, in accordance with the Basic Policy, establishing and implementing measures to facilitate them and comprehensively checking and evaluating their status of operation, as well as working to entrench and improve them. In particular, Sharp endeavors to, among other things, improve its financial reporting-related systems, strengthen compliance, and reduce business risks all for the sake of increasing the effectiveness of its internal control system.

In fiscal 2022, Sharp designed internal controls for the newly consolidated subsidiary Sakai Display Products (SDP), and conducted an exhaustive confirmation and evaluation of their operations, part of efforts to redesign and improve operations of internal controls for SDP and the rest of the Sharp Group.

These efforts helped to ensure the effective functioning of the Group internal control system in each of the control domains in fiscal 2022, as detailed in an Internal Control Report, which was submitted in June 2023.

Based on “On the Revision of the Standards and Practice Standards for Management Assessment and Audit Concerning Internal Control over Financial Reporting (Council Opinions)”, announced on April 7, in fiscal 2023 we will continue to strengthen the control functions of each control domain, and more efficiently evaluate them. We will also conduct concentrated efforts to resolve the material issues (problems) discovered during evaluation as we strive for the most efficient and effective internal control.

Internal Control System (As of June 2023)