Financial Audit
1. External Audit based on the International Standards on Auditing
(1) Background
In order to comply with the agreements signed between the JRCS and the PNSs for donations from overseas, where a financial audit was one of the requirements for the JRCS, and also to fulfill its accountability both in Japan and abroad, the JRCS decided to have an audit based on the International Standards on Auditing.
(2) Summary of the audit
An audit based on the International Standards on Auditing 800 (Audits of financial statements prepared in accordance with special purpose frameworks) (hereinafter referred to as “the Audit”) was conducted on the JRCS’s statement of income and expenditures of the overseas donations received from the PNSsfor the GEJET.
This statement was prepared to disclose the status of revenues and expenses of the donation within the accounting transactions of the JRCS, and the Audit was separated from a financial statement audit on the overall performance of the JRCS.
It was an unprecedented experience for an organisation in Japan to receive an audit based on the International Standards on Auditing 800.
The statement of income and expenditures of the overseas donation for the GEJET was prepared according to the guidelines for preparing the statement of income and expenditures of the JRCS overseas donation for the GEJET, and the audit opinion stated whether the statement was prepared in accordance with the guidelines.
| Items subject to audit | Statement of Income and Expenditures of the JRCS overseas donation for the GEJET |
|---|---|
| Standards for preparing the statement of income and expenditures | Guidelines for preparing the statement of income and expenditures of the JRCS overseas donation for the GEJET |
| Practical standards for the audit | International Standards on Auditing 800 (Audits of financial statements prepared in accordance with special purpose frameworks) |
| Format of the audit report | Stating an opinion about whether the statement of income and expenditures of the JRCS overseas donation for the GEJET was prepared in accordance with the special purpose frameworks (guidelines) |
| 1. Identification of plans / risks | - Confirmation of the planning and progress of the projects - Discussion with the President - Evaluation of the internal controls and identification of the risk of fraud at the overall level |
|---|---|
| 2. Evaluation of strategies / risks | - Evaluation of the status of the internal controls - Development of procedures to respond to the evaluated risks - Preparation of the audit strategy statement |
| 3. Implementation | - On-the-spot investigations (Miyagi / Fukushima) - Evaluation of the operational status of the internal controls - Implementation of substantive procedures (external confirmation, review of supporting documents, etc.) - Examination on how to present the statement of income and expenditures |
| 4. Review / report | - Review of the audit work - Overall review / approval - Review procedures - Acquisition of the written representations from the management - Audit report |
(3) Audit results
The Audit was conducted on the statement of income and expenditures of the JRCS overseas donation for the GEJET (for the period from March 16, 2011 through March 31, 2019), which was prepared by the JRCS.
As a result of the Audit, the Audit report confirmed that the abovementioned statement was prepared, in all material respects, in accordance with the guidelines for preparing the statement of income and expenditures of the donation for the GEJET. For FY2019-2020, the JRCS shall continue to conduct the Audit.
2. Implementation of internal audits (Recovery Task Force)
In the Recovery Task Force of the JRCS for the GEJET, self-evaluations for the recovery support projects were implemented in order to find out and correct any facts that might pose an obstacle to the improvement of the operational procedures and the appropriate implementation of the operations related to the recovery support projects.
Based on these evaluations, the Compliance Management Office, the internal audit division of the JRCS, conducted an internal audit to confirm that the decision-making process and the administrative procedures were appropriately executed in accordance with the pre-existing rules for the implementation of the recovery support projects for the GEJET.
At the on-site offices of the Recovery Task Force established in each JRCS Chapter of the three affected prefectures, internal audits were conducted on the labor, the management status of cash, and the procedures on delivery and usage status of electrical household appliances packages and welfare vehicles after their donation, related to the recovery support projects for the GEJET.
3. Audit Report
Independent Auditor’s Report for 2011
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 16 March 2011 to 31 March 2012
http://www.jrc.or.jp//vcms_lf/June2012Audit_Report.pdf
Independent Auditor’s Report for 2012
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2012 to 31 March 2013
http://www.jrc.or.jp/vcms_lf/2012_kyuenkin_auditors_report.pdf
Independent Auditor’s Report for 2013
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2013 to 31 March 2014
http://www.jrc.or.jp/vcms_lf/2013_kyuenkin_auditors_report1.pdf
Independent Auditor’s Report for 2014
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2014 to 31 March 2015
http://www.jrc.or.jp/eq-japan2011/pdf/2014_kyuenkin_auditors_report.pdf
Independent Auditor’s Report for 2015
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2015 to 31 March 2016
http://www.jrc.or.jp/eq-japan2011/pdf/JRC_2015_Income_and_Expenditure_Statement.pdf
Independent Auditor’s Report for 2016
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2016 to 31 March 2017
http://www.jrc.or.jp/eq-japan2011/pdf/JRC_2016_Income_and_Expenditure_Statement.pdf
Independent Auditor’s Report for 2017
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2017 to 31 March 2018
http://www.jrc.or.jp/shinsai2011/keikaku/2017_kyuenkin_auditors_report.pdf
Independent Auditor’s Report for 2018
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2018 to 31 March 2019
http://www.jrc.or.jp/shinsai2011/keikaku/2018_kyuenkin_auditors_report.pdf
Independent Auditor’s Report for 2019
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2019 to 31 March 2020
http://www.jrc.or.jp/shinsai2011/keikaku/2019_kyuenkin_auditors_report.pdf
Independent Auditor’s Report for 2020
Statement of Income and Expenditure of the Japanese Red Cross Society for the Great East Japan Earthquake and Tsunami International Donation from 1 April 2020 to 31 March 2021
http://www.jrc.or.jp/shinsai2011/keikaku/2020_kyuenkin_auditors_report.pdf
The Great East Japan Earthquake and Tsunami (GEJET) Relief and Recovery Programmes of the Japanese Red Cross Society (JRCS) were completed by the end of Japanese fiscal year 2020-2021 (April-March), and the remaining balance of the GEJET International Donation, JPY 334,896,720, was fully utilized for the domestic disaster-related activities of the JRCS (e.g. maintenance of its facilities and equipments for disaster response) by the end of fiscal year 2023-2024 (April-March).
