Navigating Risk in Japan

For a successful internal audit in Japan you need to understand the challenges posed by its unique risk landscape, and tailor your approach.

For a successful internal audit in Japan you need to understand the challenges posed ...

Japan is a leading investment location for global firms, seeking to take advantage of its large domestic market, highly-educated workforce and world-class infrastructure. Alongside these opportunities comes a range of risk management issues, however. Companies must successfully navigate Japan's domestic risk landscape, cultural nuances, and an ever-growing web of supranational legislation.

Internal Audit must first understand these risks and the associated challenges for local management, adapting their tried and tested global audit approach to remain effective in their role and continue to generate value for the business.

In this thought leadership we provide insights for internal audit functions delivering projects in Japan, drawing on our experience in the three areas:

Regulatory compliance

Japan's regulatory environment is evolving as strengthened laws in areas such as labour welfare, quality management and data privacy come into effect. Coupled with an increasing burden from supranational legislation affecting all multinationals, Internal Audit should focus on the clarity and formality of defined responsibilities, governance structures and risk management processed to keep pace with this change.


Japanese ways of doing business are unique and, multinationals will face challenges trying to embed a global corporate culture. Internal Audit should be aware of these differences, understand their implications for risk and control, and see how their approach can be adapted to meet the needs of both cultures without compromising on overall quality.


Across the globe the pace of technological change is creating both business risks and opportunities, and Japan has been behind the curve compared to its international peers. Whether assessing progress in addressing cybersecurity risks, or bringing in new analytical tools to support project delivery, Internal Audit should bring a renewed focus and support the business on their technology journey.

KPMG's Risk Consulting practice in Japan has a dedicated team to service international clients. They are experienced internal audit professionals with deep technical and industry knowledge from working with multinationals both in Japan and across our global member firms.
Our holistic approach combines both bilingual and native English speakers working together to deliver projects, and draws on a range of technological tools, including data analytics, process automation and digitization, to maximize the value you receive.