Sony Internal Audit - ISACA

1 Internal AuditSony Internal AuditPresentation toISACA Tokyo ChapterTuesday, March 12, 2013 Internal Audit DepartmentSony CorporationInternal AuditAgendaCase Study: Auditable Risks and Procedures 3 Advertising and Promotion, Data Analytics, Logistics, BPOO verview of sony Corporation Overview of sony Corporation and Highlights of Financial ResultsSony Internal Audit Department2IA Structure, Global Auditable Risks, Resource Allocation, Offshore Support 21 Internal Audit3 Overview of sony CorporationInternal Audit4 Corporate DataCompany Name: sony CorporationHeadquarters:1 7 1 Konan, Minato ku, TokyoFounded: May 7, 1946 Consolidated Sales and Operating Revenue:6,493,200 million yen (FY2011)Headcount:162,700 (as of March 31, 2012)Consolidated Subsidiaries.

2 1,267 (as of March 31, 2012)OverviewInternal Audit5 sony Corporate HistoryOverview1946 MayTokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation), also known as Totsuko, established in Nihonbashi, January1961 JuneCompany name changed to sony became the first Japanese company to offer shares in the United States in the form of American Depositary Receipts (ADRs) on the OTC market of the New York Stock AugustSony Prudential Life Insurance Co. Ltd., a 50 50 joint venture with Prudential Insurance Co. of America, established. It was renamed sony Life Insurance Co.

3 Ltd. in April JanuaryCBS Records Inc. the records group of CBS, acquired. It was renamed sony Music Entertainment NovemberColumbia Pictures Entertainment, Inc. acquired. It was renamed sony Pictures Entertainment NovemberSony Computer Entertainment Inc. NovemberSony Communication Network Corporation established. It was renamed So net Entertainment AprilSony Bank established in June2004 AprilCorporate shift to committee based organizational Financial Holdings Inc. September2010 JuneSony Group unveils new brand message " . sony launches NEX series , the world's smallest and lightest interchangeable lens digital still camera series.

4 Internal Audit6 sony Business Segments OverviewSource: Annual Report 2012 (Year Ended March 31, 2012) Internal Audit7 sony Group Consolidated ResultsOverviewInternal Audit8 sony Internal Audit DepartmentInternal Audit9 Internal Audit OrganizationIA DepartmentIn 2003, sony adopted the Company with Committees corporate governance system under the Companies Act of Japan. Internal Audit10 Internal Audit OrganizationIA DepartmentOrganizational independence through dotted reporting line to Audit Committee, and direct line to EVP. Global Planning OfficeAuditCommitteeTopManagementCorpora te Executive Officer, Executive Vice President and General CounselCorporate Executive Officer, Executive Vice President and General CounselSenior General Manager, Head of Global Internal AuditSenior General Manager, Head of Global Internal AuditSoMCSFH GroupGeneral Manager and Head of Regional Internal Audit OfficesGlobal Internal Audit Management TeamGeneral Manager and Head of Regional Internal Audit OfficesLatin AmericaCAD (SCA)ElectronicsMusicPicturesGAO (SCE)

5 SCEISCEASCEEJ apanIADE uropeAsia PacificChinaInternal Audit11 Purpose of Internal AuditIA DepartmentIdentify critical issuesEscalateto senior managementMake recommendationsfor improvementStrategyExecutionAuditAbility to:IAD sMission:IdentifyGapsBetweenStrategyandE xecution The Internal Audit Department (IAD) establishes and maintains the Internal Audit organization and Internal Audit activitiesand formulates Internal Audit policies for the sony group. IAD plans and executes its activities utilizing a risk based approach for the purpose of providing an objective and independentassessment on governance.

6 Risk management and control processes for the sony AuditRisk AssessmentAuditStakeholdersGlobal Key RisksRegional RisksPlanningFieldworkReportingConsolida ted ReportingBenchmarkingGood PracticeIssuesHQRegionReportingConcernRe quest Standard Audit Program CAAT Tool External Resources12 Internal Audit ProcessIA DepartmentInternal Audit13 History of sony Internal Audit DepartmentIA Department1997 Global Internal Audit1999 Risk based Audits sony Group Global Key Auditable Risk Areas Global Internal Audit Charter Global Issue Tracking Global Audit Summary Reporting Renamed the Internal Audit Department (IAD) Audit Committee established in sony Corporation Internal Audit Office established in Latin America (IALA) Internal Audit Office established in China (IAC) Renamed the Global Audit Department Started Knowledge Sharing First Risk Assessment for sony group Institute of Internal Auditors Japan Chairman's Award Global Internal Audit Policy Developed Internal Audit Office established in Singapore (IAAP) Internal Audit Office established in Europe (IAE)

7 First sony Internal Audit Newsletter Issued Internal Audit Function separated from Accounting Internal Audit Office established in America (SCA) Internal Audit Function established in Accounting1968 1987 1993 1996 98 99 2000 2002 2003 2004 05 09 2011 Internal Audit14 Global Coordination Global Internal Audit Structure: How to focus on better coordination i) among IA offices and ii) with other Audit activities? Audit CollaborationCollaboration with Regional Internal AuditRegional Meeting /Global Internal Audit Leaders MeetingCentral Support Team (CST)Joint Audit team with diversified experts from regional Internal Audit offices.

8 Collaboration with regional Internal auditors in Audit activities, Scheduling Risk/scope assessment Internal knowledge-sharingRegional meeting held to share knowledge and experience among Internal Audit offices, and conduct Audit planning workshops Quarterly Regional Meeting Annual Internal Audit Leaders MeetingEstablished CST team in India, consisting of 6 members with professional backgrounds, centrally support the global Audit activities in terms of: Data analysis by CAAT tool Information Security System controls and IT projects managementIA DepartmentInternal Audit15 Resource sharing is essential to share expertise and knowledge of the Audit process inrealityAuditResourcesNordicEurope, JapanIndiaAsia Pacific, Japan, EuropeJapanJapan, EuropeSouth ChinaJapan, Asia Pacific, EuropeHong KongJapan, Europe, Asia PacificPan AsiaJapan, Europe, Central Support TeamJapanJapan, Europe, Central Support TeamJapanJapan, Europe, Central Support TeamJapanJapan, Europe, Central Support TeamVietnamAsia Pacific.

9 JapanGulfAsia Pacific, Europe, Central Support TeamAudit CollaborationIA Department EuropeChinaJapanAsia PacificAmericasInternal Audit16 Regional MeetingsLearn from ManagementTeam SharingBenchmark Results Enjoy the management presentations and participate Continuously share between regional teams Domain depth .. credibility built from experience Continuously develops self .. loves learning Utilize the Audit Workshops to discuss and benchmarkUpdate Internal Audit team members on Business results/management direction, Internal Audit projects andvarious Audit planning topics.

10 Provide an opportunity to listen to sony / Internal Audit management s voice andalso, have common understanding of Internal Audit projects/ Audit planning status and discuss next DepartmentInternal Audit17 Team Building Activities sony Futsal CupIA DepartmentInternal Audit18 Central Support Team (CST)IA DepartmentEstablish a Central Support Team in India:Provide Internal Audit services, such as data analytics, data mining, continuous monitoring, etc. to all Internal Audit regional regional Internal Audit offices greater flexibility to meet business changes.