“execute and audit… In one process Destruction(re-examining) Creating(re-proposing) What are we going to do?

*Is that rational to make a position for “auditor”? One-tier system Council system “board” of directors shareholders Mandate or trust *Is that rational to make a position for “auditor”?

Two types of auditing managerial auditing legality auditing Accounting auditing legality auditing Appropriateness auditing

◆ human mechanism in joint stock corporation Directors Inside Executive director Outside Non-executive director Officers President, vice-president Hierarchic relationship “general manager” Persons who has some authorities to do some act for the corporation

Directors and Board Board（brain） Officer director（brain cell） director Also get this post… ・smooth management

× But in Japan… Officers audit They Never Supervise! President、vice-presidents、 Hierarchic relationship × audit They Never Supervise! Subordinated person Former Employees

Directors Officers Outside Outside Inside Outside Inside Outside Even they get this position…

Corporation with committee More than half must be outside Board Committee Committee Effective supervising executives

◆ Supervisory Committee inside outside Directors inside outside inside outside inside Officers executives