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Japan Prepares for "SOX Act" Compliance

6 Feb, 2007 By: Tetsuo Kubo imageSource

Japan Prepares for "SOX Act" Compliance

The New Year brings about change, and in 2007 Japanese businesses will need
to prepare for Japan’s version of the Sarbanes-Oxley (SOX) Act which will take
affect in April 2008.

Required for companies with stocks listed on the stock exchange, their
related companies or business connections that are required to structure
internal control standards, Japan’s new law created to prevent company
accounting scandals and protect investors will demand corporate management to
prepare, operate and report internal controls and securities reports every
fiscal term. The law also requires that corporations not only prepare internal
controls, but assess and report on effectiveness through outside audits.

Further, since it needs to be dealt with continually, documentation of
business flows and internal procedures in accordance with internal control and
utilizing IT to create files for quick searches and smooth editing works will be
needed. Electronic signatures or electronic stamps with encryption technologies
will also be needed as capabilities to prove the integrity of an electronic
document are required.

Large MFP Demand

The law is expected to create a large demand for color MFPs and color
scanners in order to efficiently create, store and utilize large amounts of
electronic documents. When printing electronic documents on paper, color MFPs or
color laser printers are required. Further, as products comply with internal
control related compliance or security, there is a large chance they will be
ordered as part of the total office system, to enable total document management.

MFPs have begun incorporating electronic signatures and time stamps
functionality to prove the integrity of an electronic document in corresponding
to the internal control requirement, such as scanning paper evidence, contracts
or receipts, into electronic documents.

OEMs are striking out with strategic alliances and breakthrough products that
offer internal control solutions to solve even the most complicated issues of
corporations. Toshiba Solutions Corporation has recently announced their
"Internal Control Solutions" to support corporations in building and
strengthening their internal controls.  Toshiba’s solutions were internally
developed to resolve issues raised through application and assessment of their
own internal control system. They have categorized internal control as three

  1. Cross Company Internal Control Solution

  2. Business Process Control Solution

  3. General Control Solution; being systematized by adding
    "Internal Control Support Project Assistance Solution "
    for the company departments to deal with Japan’s version of the SOX Act.

"As products comply with internal control related compliance there is a large
chance they will be ordered as part of the total office system, to enable total
document management."

The company has projected sales of 10 billion yen (approx. 87 million
dollars) from tools and services by 2008. Still more, as there will be a large
amount of document disposal expected from the processes of handling paper
documents and electronic document, large shredder demand is also projected for
safety and security in the disposal process.

It is a big chance for office equipment industries such as copiers, printers
and shredders to have internal control/Japan version SOX Act near at hand as we
expect to see solution proposal oriented business discussions activated
throughout 2007.

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