Business Summit – Masami Katakura, Chairwoman and CEO, Ernst & Young ShinNihon LLC

Business Summit – Masami Katakura, Chairwoman and CEO, Ernst & Young ShinNihon LLC

Our mission as accountants is to contribute to the growth of financial markets By ensuring the reliability of the company’s financial statements Since we are in charge of the transparency Of companies and their accountability We need to establish trust regarding Japan through high standards of auditing There are 2 ways to do that First, from March 2020 onwards, We will implement early the disclosure of KAM (for Key Audit Matters) This is being started with the goal of improving accounting and transparency Secondly In order to improve the governance of auditors Auditors in Japan will adopt a governance code By doing so We fulfill our commitments as top auditors To improve the quality of auditing and the governance of auditing Yes I do As far as harmonization and globalization is concerned Yes, I think globalization is accelerating Of course there are opinions on local tax systems and working conditions These opinions affect the economic activity a lot However companies always expand their activities beyond borders They are looking for countries to penetrate And they expand in a borderless context In order to support corporate activities through auditing We EY must properly conduct audits with our member firms We have our own global network We can successfully use this global network Yes. Society at large expects more transparency As far as auditors are concerned There are 2 sophisticate approaches First, for classic financial statements & audits We should expect accuracy not only of financial information But of non-financial information as well In the past, the corporate value was calculated based on the company’s balance sheet However the importance of intangible assets is increasingly being recognized If we follow this idea, corporate philosophy, business strategy, human resources and intellectual property human resources and intellectual property These are items often considered as non-financial information So we would like to consider proactively what kind of assurance We can provide for non-financial information The second approach is about digital trust As we progress into a digital society Interests in digital trust mechanism, Such as assurance of third parties involved in algorithms of AI and blockchain Is growing Of course many parts of this field are complex In the future this theme will become increasingly important As a professional firm EY holds many types of knowledge That knowledge is extremely useful for mega sports events The company would like to contribute to their success Mega-events require various skills Like budget management, schedule management Support for building a structure of internal controls For this special skills are required There are not that many people whose profile marches these skills However at EY many of us own these skills By using these skilled human resources We would like to contribute in the future to the success of mega sports events That is a really good question Progress of AI is supposed to threaten the job of accountants I really don’t think so I suspect that it is a good opportunity for audit industry to break out from labor-intensive work style. I think that the key point is role sharing As for routine work and advanced data analysis Robots and A.I. are appropriate We can leave those to A.I. But we professionals need to evaluate the integrity of the managers And in the case an anomaly is detected If it’s really an anomaly or not has to be evaluated and decided Or if some communication with the company needs to be handled by people Or if value can be added by people Humans should focus on such tasks So it is getting increasingly important to distinguish the roles of robots, AI and professional humans

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