J-SOX
Japanese regulation for ICFR in listed companies
ISO 22301
International standard for business continuity management systems
Quick Verdict
J-SOX mandates ICFR for Japanese listed companies via FIEA, ensuring financial reporting reliability through assessments and audits. ISO 22301 offers voluntary BCMS certification globally, building resilience against disruptions. Companies adopt J-SOX for compliance, ISO 22301 for operational continuity.
J-SOX
Financial Instruments and Exchange Act (FIEA)
Key Features
- Principles-based ICFR for listed companies and subsidiaries
- Explicit IT response component in COSO framework
- Management assessment with auditor attestation on report
- Risk-based scoping emphasizing key controls and evidence
- Broad coverage including asset preservation objectives
ISO 22301
ISO 22301:2019 Business Continuity Management Systems
Key Features
- PDCA cycle for continual BCMS improvement
- Business Impact Analysis (BIA) and Risk Assessment
- Annex SL structure for standards integration
- Leadership commitment and organizational roles
- Operational testing and exercise requirements
Detailed Analysis
A comprehensive look at the specific requirements, scope, and impact of each standard.
J-SOX Details
What It Is
J-SOX, or Japan's Financial Instruments and Exchange Act (FIEA) internal control provisions, is a regulatory framework mandating internal controls over financial reporting (ICFR). Enacted in 2006 and effective April 2008, it requires management assessment of ICFR effectiveness for ~3,800 listed companies and subsidiaries. It uses a principles-based, risk-based approach aligned with COSO, adding IT response and asset preservation.
Key Components
- Five COSO components plus IT response.
- Entity-level, process-level, and IT general controls (ITGCs).
- Key controls over revenue, procurement, IT access, change management.
- Management evaluation audited by external accountants; no fixed control count, emphasizes auditable evidence.
Why Organizations Use It
Enhances financial reporting reliability, investor trust, and market transparency. Mandatory for listed firms; reduces restatement risks, audit costs via efficiency. Builds governance, IT resilience; strategic benefits include operational discipline and lower capital costs.
Implementation Overview
**Phased, risk-basedgovernance setup, scoping, control design, testing, reporting. Applies to Japanese-listed entities, multinationals with subsidiaries. Involves documentation, ITGCs, continuous monitoring; external auditor reviews management's report annually.
ISO 22301 Details
What It Is
ISO 22301:2019 is the international standard titled Security and resilience — Business continuity management systems — Requirements. It provides a certifiable framework for establishing, implementing, maintaining, and improving a Business Continuity Management System (BCMS). The primary purpose is to protect against, reduce likelihood of, and ensure recovery from disruptions, using a risk-based PDCA (Plan-Do-Check-Act) approach aligned with Annex SL high-level structure.
Key Components
- Clauses 4-10 cover context, leadership, planning (including BIA and RA), support, operations, performance evaluation, and improvement.
- No fixed controls; flexible requirements tailored to organizational risks.
- Core principles: resilience, continual improvement, integration with standards like ISO 27001.
- Certification via accredited bodies with 3-year validity and annual audits.
Why Organizations Use It
- Mitigates risks from cyberattacks, disasters, supply chains; reduces downtime and costs.
- Meets regulatory needs (e.g., NIS Directive); lowers insurance premiums.
- Builds stakeholder trust, enhances competitiveness, supports tender wins.
Implementation Overview
- Phased approach: gap analysis, BIA/RA, policy development, training, testing, audits.
- Applicable to all sizes/sectors; accelerated by digital platforms (e.g., 60 days possible).
- Two-stage certification audits required for formal compliance.
Key Differences
| Aspect | J-SOX | ISO 22301 |
|---|---|---|
| Scope | Internal controls over financial reporting (ICFR) | Business continuity management system (BCMS) |
| Industry | Listed companies in Japan and subsidiaries | All industries worldwide, all sizes |
| Nature | Mandatory under FIEA securities law | Voluntary international certification standard |
| Testing | Management assessment, external auditor review | Internal audits, exercises, management reviews |
| Penalties | FSA fines, reputational damage | Loss of certification, no legal penalties |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about J-SOX and ISO 22301
J-SOX FAQ
ISO 22301 FAQ
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