Internal Audit

As a part of SMBC Group’s internal control framework, the Internal Audit Department (the Department) verifies the effectiveness of the internal controls of each Business Unit, risk management and compliance departments, and other departments from an independent standpoint and pursues the quality of internal audits in order to contribute to the development and the highest trust across the entire SMBC Group.

The purpose of internal audit at SMBC Group is the objective provision of assurance*1 and consulting services in accordance with the policies and plans approved by the Board of Directors but independent of management, Business Unit and the departments responsible for risk management and compliance, in order to add value to SMBC Group and improve its operations.

The mission of internal audit at SMBC Group is to grow and preserve the value of SMBC Group by providing riskbased and objective assurance, advice and insight.

The Department has been established under the Audit Committee and is independent from each Business Unit, risk management and compliance departments, and other departments. Internal Audits within our Group companies are structured broadly in line with SMFG. The Group CAE oversees Group-wide internal audit activities.

The Department verifies the appropriateness and the effectiveness of internal control that aims to assure the appropriateness of Group operations and the soundness of assets by conducting on continuous monitoring of Group companies’ internal auditing status and other activities. The activities are based on the “Group Internal Audit Charter” and the “Audit Policy and Strategy” formulated by the Audit Committee and the Board of Directors.

Major audit findings and relevant informations are regularly reported to the Audit Committee, the Board of Directors, and the Group Management Committee. Whilst the Department strives to strengthen cooperation to conduct proper audit practices through regular information exchanges with external auditors.

The Department has adopted auditing methods in accordance with the Institute of Internal Auditors (IIA) standards, conducts risk-based audits on a Group and global basis.

To implement effective and efficient internal audits, the Department conducts monitoring by attending important meetings and by obtaining internal management documents of SMFG and Group companies. The Department engages in a continuous two-way dialogue with each Business Units, departments responsible for risk management and compliance, and other departments as it strives for an accurate understanding of risks in business. The department also develops Group and global best practices and undertakes audit activities that make use of technologies such as AI.

In addition, the Department strives to enhance groupwide internal auditors’ expertise by holding training programs, and encouraging auditors to obtain internal auditor’s international certification.

Furthermore, the Department enhances its quality assurance on a Group-wide basis by both fully satisfying the IIA standards and referring to G-SIFIs leading practices.