J-SOX
Japan's regulation for ICFR in listed companies
ISO 28000
International standard for supply chain security management systems
Quick Verdict
J-SOX mandates ICFR assessments for Japanese listed firms to ensure financial reliability, while ISO 28000 offers voluntary supply chain security certification globally. Companies adopt J-SOX for regulatory compliance; ISO 28000 for resilience and market trust.
J-SOX
Financial Instruments and Exchange Act (FIEA)
Key Features
- Principles-based ICFR management assessment and audit
- Explicit Response to IT control component
- Risk-based scoping using COSO framework
- Covers listed companies and foreign subsidiaries
- Broad Securities Report disclosures evaluation
ISO 28000
ISO 28000:2022 Security management systems Requirements
Key Features
- Risk-based supply chain security assessment and treatment
- PDCA cycle for continual SMS improvement
- Leadership commitment and top management accountability
- Integration with ISO 31000 and ISO 22301
- Controls for external providers and processes
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 internal control over financial reporting under the Financial Instruments and Exchange Act (FIEA) promulgated in 2006, is a regulatory framework mandating ICFR for listed companies effective April 2008. It requires management to design, evaluate, and report on controls ensuring reliable financial reporting, with principles-based, risk-based approach guided by BAC Implementation Guidance.
Key Components
- Five COSO components plus explicit Response to IT.
- Entity-level, process-level, ITGC controls.
- Risk assessment for material misstatements; key controls over cycles like revenue, IT access, change management.
- Management assessment audited by external accountants.
Why Organizations Use It
- Mandatory for ~3,800 listed firms and subsidiaries to ensure transparency, investor confidence.
- Mitigates restatement risks, fines; builds governance, operational efficiency.
- Enhances trust, reduces capital costs amid auditor shortages.
Implementation Overview
- Phased: governance, scoping, design, testing, monitoring.
- Applies to Japanese-listed entities, multinationals; heavy documentation, IT focus.
- Annual management reports with auditor attestation; continuous monitoring recommended. (178 words)
ISO 28000 Details
What It Is
ISO 28000:2022 is an international certification standard specifying requirements for establishing, implementing, maintaining, and improving a security management system (SMS) focused on supply chain security. It adopts a risk-based, PDCA (Plan-Do-Check-Act) approach to manage threats like theft, sabotage, and disruptions.
Key Components
- Clauses 4-10 cover context, leadership, planning, support, operation, evaluation, and improvement.
- Emphasizes risk assessment aligned with ISO 31000, security plans per ISO 22301.
- No fixed controls; tailored via risk treatment.
- Certification via third-party audits per ISO 28003.
Why Organizations Use It
- Reduces supply chain risks and incidents.
- Meets contractual, regulatory, insurance needs.
- Enhances resilience, market access, partner trust.
- Provides governance for integrated management systems.
Implementation Overview
- Phased: gap analysis, risk assessment, controls, training, audits.
- Scalable for all sizes/industries; 6-36 months typical.
- Involves leadership policy, supplier controls, continual reviews.
Key Differences
| Aspect | J-SOX | ISO 28000 |
|---|---|---|
| Scope | Internal controls over financial reporting (ICFR) | Supply chain security management system (SMS) |
| Industry | Japanese listed companies and subsidiaries | All industries worldwide, supply chain focused |
| Nature | Mandatory under FIEA securities law | Voluntary international certification standard |
| Testing | Annual management assessment, auditor attestation | Internal audits, management reviews, certification audits |
| Penalties | FSA fines, reputational damage, market consequences | Loss of certification, no legal penalties |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about J-SOX and ISO 28000
J-SOX FAQ
ISO 28000 FAQ
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