J-SOX
Japanese regulation for ICFR in listed companies
ISO 27018
International code of practice for PII protection in public clouds
Quick Verdict
J-SOX mandates ICFR for Japanese listed firms to ensure financial reliability, while ISO 27018 voluntarily guides cloud providers on PII protection. Companies adopt J-SOX for regulatory compliance and market trust; ISO 27018 for procurement edge and privacy assurance.
J-SOX
Financial Instruments and Exchange Act (FIEA)
Key Features
- Principles-based ICFR for listed companies and subsidiaries
- Explicit IT governance and response component
- Management assessment with auditor report attestation
- Risk-based scoping aligned to COSO framework
- Broad coverage of Securities Reports disclosures
ISO 27018
ISO/IEC 27018:2025 PII protection in public clouds
Key Features
- Privacy controls for PII in public cloud processors
- Subprocessor transparency and location disclosure requirements
- Mandatory breach notification to PII controllers
- Prohibits secondary PII use like advertising without consent
- Supports data subject rights access erasure portability
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). Promulgated in 2006 and effective April 2008, it targets reliable financial disclosures for ~3,800 listed companies and subsidiaries. It employs a principles-based, risk-based approach with management-led assessments.
Key Components
- Five COSO components plus explicit IT response.
- Covers entity/process/IT controls, asset preservation.
- ~Key controls** over revenue, procurement, ITGCs (access, change management).
- Management evaluates; auditors attest report reliability.
Why Organizations Use It
Enhances reporting credibility, investor trust; mandatory for listed firms under FSA. Mitigates misstatement risks, reduces audit costs via efficiency. Builds governance maturity, supports market access.
Implementation Overview
Phased: governance, scoping, design, testing, monitoring. Applies to listed/multinationals in Japan. Requires documentation, ITGC focus, annual reporting/audit. (178 words)
ISO 27018 Details
What It Is
ISO/IEC 27018 is an international code of practice extending ISO/IEC 27001 and ISO/IEC 27002 specifically for protecting personally identifiable information (PII) processed by public cloud service providers (CSPs) acting as PII processors. Published in editions including 2014, 2019, and latest 2025, it addresses cloud challenges like multi-tenancy and cross-border data flows using a risk-based, control-oriented approach.
Key Components
- Adds ~25–30 privacy-specific controls on consent, purpose limitation, transparency, data minimization, and accountability.
- Maps to ISO 27001 Annex A themes (Organizational, People, Physical, Technological).
- Assessed within ISO 27001 certification audits; no standalone certificate.
- Aligned with ISO 29100 privacy principles and OECD guidelines.
Why Organizations Use It
- Enhances trust, accelerates procurement, and supports GDPR Article 28 processor obligations.
- Mitigates privacy risks, aids cyber insurance, and provides competitive differentiation.
- Demonstrates due care for regulators, insurers, and customers.
Implementation Overview
- Conduct gap analysis, update ISMS and Statement of Applicability.
- Implement subprocessors disclosure, breach notification, training.
- Suitable for CSPs all sizes; requires accredited third-party audits annually.
Key Differences
| Aspect | J-SOX | ISO 27018 |
|---|---|---|
| Scope | ICFR for listed companies | PII protection in public clouds |
| Industry | Japanese listed companies, global subsidiaries | Cloud service providers worldwide |
| Nature | Mandatory FIEA regulation | Voluntary ISO code of practice |
| Testing | Annual management assessment + auditor review | ISO 27001 audit extension, annual surveillance |
| Penalties | FSA fines, imprisonment, delisting | Loss of certification, no legal penalties |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about J-SOX and ISO 27018
J-SOX FAQ
ISO 27018 FAQ
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