KPMG Japan
Our Story
2020/21
KPMG Japan

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Index Map

Inspire Confidence,
Empower Change.
Our Purpose

Inspire Confidence, Empower Change.
We work to inspire confidence in the economy
while empowering clients and society to make positive changes.
This is Our Purpose.
We work shoulder-to-shoulder with our clients,
delivering real results, while we ourselves change
for the better as we seek to be the Clear Choice.
This is The KPMG Story – building on the past and leading into the future.

01© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Index Map
01 Our Purpose
03 Management Message
09 Our Journey
11 Value Creation Story
15 Our Vision and Strategy
27 Management Committee Members/Governance Structure
29 Service Line
33 KPMG IMPACT
35 Citizenship/Inclusion & Diversity
37 Three-year Performance/Overview of Member Firms© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/21

02

Management Message

To be the Clear Choice –Now and in the future
Hiroyuki TAKANAMI
CEO, KPMG Japan
CEO, KPMG AZSA LLC

Our Purpose
KPMG Japan’s Purpose is to “Inspire Confidence, Empower Change,” that is,
to contribute to the realization of a fair society and to the sound developmentof the economy through delivering high-quality services.
It is imperative that we foster the public’s confidence in KPMG Japan in orderto achieve Our Purpose. We have been entrusted to provide services that
contribute to the public interest on the premise that we have a highawareness of our social infrastructure role, and that we are recognized as
being worthy of the trust placed in us by the public and our clients.
It is therefore our utmost priority that we ensure that no matters arise in our
audits that may surprise the market, and that we constantly maintain theneutrality and independence expected of an accounting firm for our tax andadvisory services. Our impartial and principled people who practice this every

Work Experience Hiroyuki managed theaudits of major financial institutions before
serving as Senior Executive Board Member incharge of Financial Services and subsequently
Senior Executive Board Member in chargeof Advisory. He concurrently served as thefirst President of KPMG Consulting Co., Ltd.,established in 2014. He has been in his current
role since July 2019.

day and our open corporate culture in which we embrace diversity serve as
KPMG Japan’s foundation for value creation.

03© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

04

Management Message

Reﬂections on this year
This year we were stricken by thecoronavirus pandemic, and faced thechallenge posed by the year-end
closing and audit peak season aheadof the rest of the world. We wereable to fulfill our responsibilities whileconsidering the safety of our employees
thanks to the understanding andcooperation of our clients, in addition
to having previously prepared anenvironment for realizing a more
flexible workstyle through ourinvestments in digitalization. At thesame time, we felt the need toprepare for the New Normal era byenvisioning a new mode of service
provision by reexamining workstylecontribute to accelerating initiatives

stakeholders, we believe we need toand service objectives. To this end

for the sustainability of society

go beyond our existing service lines

we launched the New Normal

and companies.

and demonstrate our comprehensive

Project, and measures which have

While there have been major changes

strength by sharing our insights andbeen under consideration are now

in society and the way business is

experiences. Toward this end, we will

being put into practice.

conducted, our mission to fulfill our

proactively address the following

Through the pandemic, we havesocial responsibilities and contribute tothree points.

reaffirmed what is important to us.

the development of a sound and

The first is further strengthening our

The COVID-19 pandemic has led us tosustainable economy has remained

global capabilities. How to effectively

reaffirm what is important to us –unchanged. However, we mustbuild and operate governance at

namely, prioritizing the health andcontinue to pursue self-transformation

overseas locations in a remotesafety of our clients and KPMG Japanin response to the drastic changes inenvironment amid the ongoing

employees, first and foremost at all

our environment in order to continue

COVID-19 pandemic is an urgent

times, while cooperating as a corporate

winning the trust of society.

matter. For audits, we will continue tocitizen to bring the pandemic to an
end by minimizing infection risk.

Responding to the constantly

Our experiences in this pandemicchanging expectations of society

have provided an opportunity for us to05

bolster group audit initiatives, while
for advisory, we will strengthen ourability to provide services customized
to individual companies from therethink the way we do business and

The expectations of our important

viewpoint of reinforcing governanceto have a greater awareness of our

stakeholders — the public, our clientsin overseas locations.

goal of sustainable growth. Withand our people — are shifting alongside

The second is addressing technologicalconsciousness of the need forsignificant changes in values andprogress. The need to respondsustainability growing on a global

behaviors throughout the world due

efficiently and effectively by utilizing

scale, KPMG Japan has created ato COVID-19, which is said to havedata analytics is greater than everplatform called KPMG IMPACT for

moved the clock forward five to ten

before, not only for companies’ internal

services relating to ESG and climateyears. In order to be the first tocontrols but also for the audit, tax andchange which had previously beenrecognize such changes and continue

advisory services that we provide.

provided individually, allowing us toresponding to the expectations of our

KPMG Ignition Tokyo, which was© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

established as a base for developing

fostering true professionals whoorder to realize a sustainablecutting-edge technology in July 2019,

embrace their daily tasks with a higheconomy. With this backdrop, thewill take the lead and work together

sense of ethics and integrity, and are

information needs of the capitalwith our group companies to address

trusted by all our clients.

markets and what is expected of us

transformation in all areas, providing

Recently, it became evident that someare changing drastically. If we do notsociety and companies with new,of our firm’s partners and professionals

address these expectations in a swift

high value-added insights andwere involved in inappropriatemanner, we could face a crisis ofknowledge. We have also launched aconduct relating to the completion of

purpose. We believe that we cantalent development program to ensure

e-Learning programs within the firm,always provide high value-added

all of our people are capable of utilizing

and consequently did not satisfy

services by anticipating changes intechnology and responding to thecredit requirements. We sincerely

the business environment, and gain

digital needs of society and clients.

apologize for the inconvenience andthe trust of our clients by

The third is appropriately addressing

concern that this matter has caused

appropriately supporting their healthyrisk. Uncertainty about the future hasfor our stakeholders.

growth. Further, we want KPMG

been growing as a result of COVID-19

We unreservedly acknowledge thatJapan’s people and their families to be

and the VUCA era, and we are required

such conduct lacked the ethics

motivated and have a sense of mission

to understand future risks by industry

required of professional accountants,that they are contributing to the growth

and address them appropriately. At

and furthermore that insufficiencies inof clients and the development of

KPMG Japan, we will address thesethe function of our internal control

society, and to feel confident in theirchallenges proactively by consolidating

system led to this incident. We will

skills as world-class professionals.

accumulated industry insights andtake initiatives to prevent a

KPMG Japan aims to understand theaccelerating the process of building

recurrence of such conduct byexpectations of the public, our clientsan organization and fostering talent

strengthening our internal control

and our people, and continue to earncapable of demonstrating oursystem while thoroughly

the trust of all important stakeholders

collective strength as One KPMG.

implementing compliance education.

while maintaining harmony among
these respective expectations.

Our people are the foundation of ourability to continue meeting the

We aim to be the Clear Choice

We believe this is what is meant by
our Vision – the Clear Choice.

expectations of society. Even in thecurrent situation where remote

In addition to the pandemic, we also

working has become more common,

face the unprecedented and significant

trust between people and between

challenge of addressing risks

organizations remains the most

associated with climate change —important thing. We are committed toa challenge that cannot be avoided in© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/21

06

Management Message

Work together throughthe unprecedented change of era
Toshiya MORI
Chairman, KPMG Japan-- The Clear Choice ----Shoulder to Shoulder --What we envision forourselves in the New Normal

Continuing to empowerchange as a trusted partner

in anticipation of the transformationof industry rules to come.
In order to move forward together,shoulder to shoulder, as a reliable

07

KPMG Japan comprises eight

The tide of globalization and digital

partner of companies in this era ofprofessional firms supported bytransformation has become a moredisruption, we will develop digital

almost 9,000 people. KPMG, thecomplex and unprecedented torrent

solutions led by KPMG Ignition Tokyo

global network to which we belong,amid the COVID-19 pandemic, andand strengthen KPMG’s global

has approximately 220,000 people

management of companies need to

network, while actively developingwith diverse characteristics andbe prepared for re-creation, building atalent with digital literacy and a global

expertise in 146 countries andresilient organization and reexamining

mindset. We will provide value-added

territories worldwide, and webusiness models and corporate social

support through such cross-function

cooperate and work together tovalue, or purpose, from zero.

and cross-border initiatives andprovide audit, tax and advisory

In terms of global business, it istalent development.

services based on Our Vision to benecessary not only to review the

the Clear Choice.

supply chain, but also to reexamine

KPMG’s greatest strength is ourthe business portfolio, utilize theculture rooted in mutual acceptancestrengths of the company, and firmly

and respect, which serves as theidentify areas that are in line with thefoundation for value creation. Even in

management philosophy.

In order to lead the transformation ofthis New Normal era in which we

For the promotion of digitalsociety and business and to always

have experienced the worldwide

transformation (DX), it is essential tobe the Clear Choice, what is required

spread of the COVID-19 pandemic,

encompass not only DX as an extension

of KPMG is to fully understand Our

we aim to contribute to clients and toof existing business such as

Purpose and act accordingly.

society as One KPMG through our

reduction of operation costs, but also

Integrity and Excellence arestrong relationships and networks.

DX for future business transformation

prerequisites for professionals.

--Values Refresh--

What we value andwhat we believe© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Our
ValuesIntegrity

We do what is right.

never stop learning
Excellence We
and improving.

Courage

We think and act boldly.

TogetherWe respect each other anddraw strength from our differences.

For Better We do what matters.

Courage is for boldly taking on

Our business must be one thatchallenges for the creation of newcontributes to the reliability of thevalue that is indispensable in times ofcapital markets and to the public

turbulence. Together is the driving

interest, rather than pursuingforce for providing a wide range ofshort-term profits or scale. I believe it

services as a team, and For Better isis my mission as Chairman to create athe will to act to build a better society.

group that earns the trust of companies

At KPMG, we have refreshed ourand society through promulgatingcode of conduct to include these fivethese new Values, and nurturing

Values in order to become a stronger

professionals who not only have highorganization capable of addressing

levels of expertise and insight, butchanges with the times.

also have a strong spirit of fairness.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Work Experience Toshiya
served as Head of Advisory of
KPMG Japan since 2015 andassumed his current role in
October 2018. He has extensive
experience providing both audit
and advisory services to assist
global corporations with a wide
range of management issues.

KPMG Japan Our Story 2020/ 21

08

Our Journey

Mitchell &Peat Marwick
fice
ed a Japan Of
Company open
any
mp
Co
&
sen
der
Arthur An
Officeopened a Japan

1949
1962

2004

1974a Audit Corp. established

1987

Shinw

2003 2004

lishedInoue Saito Audit Corp. estab

Audit firm Asahi Shinwa & Co.

1969 Audit firm Asahi & Co. established 1985 established through merger
Andersen & Company
1962 Arthur
opened a Japan Office

1993

ished with the
KPMG AZSA LLC establ AZSA & Co.
and
Co.
&
hi
Asa
of
r
rge
me

ed
KPMG AZSA & Co. establish
lishedestab
rationCorpo
TaxAsahi KPMG

Asahi & Co.
established through merger

Corporation

G Tax
2004 KPM
established

2002

KPMG Peat Marwick Tax Corp. established1954 The PMM Japan Office opened a tax unit

2001 KPMG FAS Co. established2000 KPMG Healthcare Japan Co. established
MG AZSA Sustainability2004 KP
Co. established

2000

World Events

09

1991

1995

Japan’s
economic
bubble burst

Explosive useof the Internet

1996
Financial
Big Bangeagement Committe

KPMG Group Man
establisheded1985 Minato Audit Corp. establish Inoue Saito Eiwa Audit Corrgep.r
through me
ablished 1991 established1984 Eiwa Audit Corp. est

2001

2008

Dotcombubble burst

Globalfinancial crisis

Release of
Microsoft Windows 95© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan’s current culture has been cultivated through various cultures mixing together,a result of mergers and integrations and repeated organizational restructuring.
We value two goals which may seem contradictory:- For individuals of different origins to make the most of their unique characteristics- To enhance our collective strength as an organization
It is the chemistry that arises from our diverse talent that is KPMG Japan’s identity.

mitteeanagement Comee (monthly)
KPMG Group M
ement Committ
ag
an
M
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pa
Ja
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M
KP
to
renameddAudit/tional principles agree
KPMG Japan opera
i,
ach
em
consolidated in Ot
Advisory functions
ld
he
ng
eti
Me
ff
st
an Kick-oting held
Tokyo 1 KPMG Jap
pan Partners Mee

20 11
2010

2013

1st KPMG Ja

ated
KPMG AZSA LLC celebr2019 the ﬁrm’s 50 anniversary
th

hed /

G Management Co. establis

blished201 1 KPMAZSA Ofﬁce Mate Co. esta

Consulting Co.
Business
KPMG Management
2014 KPMG
2012 KPMG
2011 Consulting
established
Advisory Co. established
Co. established

MG Ignition Tokyo2019 KP
established

2010

2020

2010

2011

2014

2015

2019

Widespread use ofcloud computing

The Great
East Japan
Earthquake

Digitalization
starts to accelerate

SDGs adopted
at the United Nations
Sustainable
Development Summit

New “Reiwa” era© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

2020
COVID-19 declareda pandemic by WHO

KPMG Japan Our Story 2020/ 21

10Value Creation Story

Creation Story

Our Strategy

P15◎ Pursuing quality◎ Exerting ourcollective strength◎ Strengtheningnt
ion/
me lobalizatn/Gironv lizationeitaalrn s / DigetdEx trenour talent

y
ilit

Era
of

VU
CA
/

Ne
w

No
rm
al

/S
us
ta
in
ab

Our ability to support clients in solving challenging issues and thediverse expertise of our people contribute to society by assisting ourclients to create value, enabling KPMG to create our own value in turn.
The insights gained from this contribution result in a stronger
foundation for our business which allows us to enhance ourcapabilities to solve ever more complex issues.
Through this process, we can achieve sustainable growth andfulfill the role expected of us by our clients and society.

Through our audit and accounting
services, we will ensure thereliability of information whiledriving positive change andcontributing to the realization of afair society and sound economy.

◎ Corporate culture◎ Our people◎ Global network◎ Technologies and solutions◎ Trust from society andstrong customer foundation (brand)

ti
sa
er
m
to
s
us
sk
dc
se
Ri
ea
ecr
t)/D
rus
d (t
ran
ur b
e to oDamag

Our open corporate culture in which
we make use of our impartial andprincipled people and various
expertise serves as KPMG Japan’sfoundation for value creation.

Inspire Conﬁdence,
Empower Change.

sf
ac
tio
n/
Lo
ss
of
co
mp
eti
tive
edg
e

No. of employees

No. of Certified Public Accountants

8,983% of female employees

32.4％

No. of Certified Public Tax Accountants＊1

235

3,316
No. of female partners

54% of non-Japanese

3.5％

Revenues

No. of global professionals＊2

165.8
billion yen

2,993

No. of nationalities% of employees with a disability＊3

34

2.55％

Global Network
No. of Countries
and territories

No. of employees

146 226,882

No. of employees taking maternity or childcare leave
Female

190

17

Male

＊1 Certified Public Tax Accountants both registered and non-registered (including those who have passed the examination and those who are exempted from examination) who are engaged in Tax services.
＊2 Global professionals are those who have overseas work experience, those who have completed global skills training courses, and foreign nationals.
＊3 Total percentage of persons with disabilities who are employed by KPMG AZSA LLC, the parent company of a special subsidiary, AZSA Office Mate Co., Ltd., and KPMG Consulting Co., Ltd.

11

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Regu
lato
ry c
han
ges

Output

P30-32◎ Audit opinion

/Ch
an
ge
si
ne
xp
ec
ta

◎ Services/Advice◎ Seminars/Training◎ Research reports

m
fro
ns
tio

ts
lien
dc
an
ty
cie
so

We will embracechallenges together as areliable advisor to bringabout genuine outcomes,
using innovative methods anddeep insights with passion anda solid philosophy.

Value for society andthe market

Value for clients・Growth of economic society
・Maintaining and improving
through ensuring the soundness
trust within societyof capital markets
・Realizing sustainable growth
・Providing reliable information
through achieving strategic goals
・Producing talent with expertise

Service lines

・Reducing various risks and utilizing
opportunities related to business activities◎ Audit◎ Tax◎ Advisory

t pre
sence

P29

・Growth as a true
professional

・Increasing motivation

We provide value to ourstakeholders by constantly
anticipating change and meeting
expectations. The trust in ourorganization gained in return is thesource of KPMG’s growth.

The Clear Choice
To be the Clear Choice –Now and in the Future

of
po
em
rtu
pl
oy
ni
ee
s/I
tie
nc
s
rea

・Realizing well-being

sed
ma
rk e

Value foremployeesrowth

We strive to be the Clear Choice,
now and in the future, for our clients,society and all other stakeholders,through our consistent provision ofoutstanding services.

th
row
eg
l
b
aina
Sust

of

G
n/
tio
za
i
an
rg
ro
u
o

p
O

Share of audit market
Share of top 100 listed companies
by market cap

1

No.

Share of 100 listed companies
by revenue

1

Share: 35.0%

No. of audit clients

3,635

No.

1

1

Share: 38.0%

No.

Asia Tax Firm ranking＊4

No.

Share of 224 Japanese companies
reporting under IFRS® (or planning to)Share of 11 SEC registrants
in Japan

1

Share: 30.0%

No.

Share: 36.3%

Global People Survey 2019 results＊5

M&A advisory ranking
Based on publicly announced deals

Based on In-Out deals

52

Motivation to contribute to and satisfaction with the ﬁrm

No.
No.
January 1, 2019 – December 31, 2019

Source: Refinitiv (formerly Thomson Reuters Financial & Risk)

69%% of respondents giving a rating offour or more based on a five-point scale＊4 Received awards in five categories including “Asia Tax Firm of the Year” as KPMG Asia Pacific in the Asia Tax Awards 2020 selected by International Tax Review magazine.
＊5 Global People Survey (GPS) is an attitude survey conducted on a regular basis for all people who work for KPMG member firms worldwide, as part of the firm’s ongoing improvement initiatives.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/21

12

Value Creation Story

Value Creation Story

KPMG
KPMG’s strength lies in our diversity which is the backbone of our value-creating story.
KPMG Japan exists today in its current form having undergone many mergers and integrations.
Our history is one of respecting diversity and accepting different cultures and values,
forming the cornerstone of our corporate culture of inclusion and respect.

Teru took his first childcare leave
when his second child was born,and is currently on leave for his third child.

Q.

Teru IIDA
Senior, KPMG AZSA

What are your thoughts about yourexperience of taking childcare leave?

It made me reaffirm that childcare should be done jointly
by both parents, rather than being centered on themother. I now have a more active awareness of myrole in childcare.
While experiencing the challenges of childcare, I feelthat my everyday life is more fulfilling than before. I am
able to see in real time the subtle changes in
expressions that a newborn makes from day to day, andfeel that our bond as a family is strengthening as a resultof my spending more time with my children and wife.
Being able to make time to study in my areas of interestin between taking care of the children is also anadvantage. I can only think of advantages (also vouched
for by my wife) and no disadvantages, and encourage
everyone to take childcare leave.

Q.

Please share your career plan
after you return from your leave.

After I return, I will be balancing childcare and work,and envision gradually increasing the weight of my work
according to my children’s growth, and deepening myknowledge in my preferred field to move aheadin my career.
I also feel that an environment in which it is easy formen to take childcare leave will lead to a workplace thatmakes it easier for women to return to work andcontinue their careers, so I would like to be involved increating such an environment.

13© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Atsuko supports corporate sustainability
management utilizing her knowledge andexperience of both natural sciences andcorporate management/finance.

Q.

Please talk about
your ﬁeld of expertise.

Atsuko WATANABE

I am involved in providing advice on corporate

Manager,
KPMG AZSA Sustainability

initiatives regarding the environment, safety
and sustainable procurement and the like, as
well as assurance services for related disclosures(sustainability information). In recent years inparticular, the consideration and disclosure ofmatters regarding the impact of climate change
on management, and relevant countermeasuresand strategies, have come to be required, andthe area where natural sciences and corporate

Q.

How do you feel about some of the recent changes in companies
and society from the perspective of your ﬁeld of expertise?

management and finance directly connect isexactly the scope of my work. I did research

Having gone through the experience of theadvisory work related to management.

on conservation ecology at graduate school

COVID-19 pandemic, the world is going toI think the world is now standing on the brinkand that led to my decision to join KPMG

change dramatically in terms of workingof either heading in the direction of

AZSA Sustainability. While my field ofstyles and values.

sustainability, or failing to address issues

expertise may seem unique within KPMG, I

Recently, companies’ efforts related to ESG

such as climate change. Personally,

believe I am in an environment where we can(Environment, Society, Governance) have

I hope that my work will help to create aprovide unprecedented value through working

been emphasized in particular, and I feel thatmovement toward achieving social andwith a team of diverse professionals.

diverse expertise is now being required for

economic sustainability.

After giving birth to her first child,
Junko accompanied her husband who also
works at KPMG AZSA on an international
assignment during her maternity leave, andreturned to work after a three-year blank.

Junko INADAManager, KPMG AZSAQ.
Q.

Are there any changes in the way
you work before and after working remotely?

What kind of workplace is
KPMG for women?

Although we tend to think of women raisingchildren as a particular segment of the
population, their individual views andsituations vary. KPMG offers an environment

It depends on the week, but I currently work in

as regards my work. I also feel that it isin which you can choose a workstyle thatthe office one day a week, from home three days

becoming easier to work in a way that suits

best fits your needs, making it easy to work.

a week, and at the client site one day a week. I

the various situations of individuals. People

I had a three-year blank, but I hope toam also now able to attend meetings in thethroughout the organization now understandcontinue to accumulate knowledge andevening or later, which had been difficult to dothat it is only natural that the best time of day

experience as a CPA while flexibly adjusting

before, by attending meetings online fromand situation for working differs for eachmy own way of working.

home while watching my child. While I need toindividual. The degree of freedom over ourThis year, I am also participating in an

be careful about the balance between my public

use of time has increased, and the small

external talent development training programand private life and a lack of exercise, working

stresses relating to balancing work, childcare

for women, which I would like to apply to myfrom home has otherwise reduced restrictions

and housework have been gradually relieved.

future work and career.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

14

Our Vision and Strategy

Quality
II
I
I
I
II

II IIIIIIII

Ensure steadfast quality

Utilize advanced,
innovative technology

III

I

IIIII

IIIIIIIIIII
I
I
I
I
II
III

I

III

II

Maintain a high standard ofexpertise and provide valuable insightII IIIII

Ignition

CareerDemonstrate our collective strength

Promote professional growth

IIII

III
I
I
I

Promote market-oriented culture

IIIIIIIIII

Deliver seamlessly integrated solutions

III

I

III
I
I
I

Collaboration

Develop professionals who
excel in the market
Be confident and proudof our people and our work

KPMG Ignition Tokyo connects KPMG
Japan’s three strategic pillars – Quality,
Career, and Collaboration – to drive theevolution of KPMG Japan and allow us
to further support the transformationand innovation agenda of our clients.
Introducing technologies to Audit, Tax
and Advisory services, KPMG Ignition
Tokyo connects KPMG Japan
seamlessly to the KPMG global networkin order to deliver solutions to thecomplex, rapidly-changing issues of ourclients and society as “One KPMG.”

15

Ignition
Providing new value

P17

We will realize more robust execution of KPMG
Japan strategies by also strengthening Quality,
Career and Collaboration in terms of digitalization.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

VisionTo be the Clear Choice – Now and in the Future

To share our goals and create visible results,
we strive to be the Clear Choice while continuing to transform ourselves.

Strategy for realizing Our Vision

Quality

CareerQuality strategy

Human resource strategy

Ensuring solid quality

P19

As an accounting firm, we will constantly pursue
quality that enhances two types of value: value
for society and value for companies.

Fostering professionals

Collaboration
Organizational strategy

P21

We will foster talent who not only acquire highlevels of specialized knowledge and cutting-edge
technology skills but also confront the challenges
faced by society and companies with sincerity
and can make appropriate judgments, and will
provide an environment where individuals can beconscious of their own progress.

Exerting collective strengthP23

We will strengthen our structure as one that candemonstrate our collective strength through anorganic integration of our professional insights andmethodologies with the latest digital technologies,
and support our clients resolve issues throughour global network.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

16

KPMG Digital

KPMG Japan will combine our diverse professional insights in the audit,
tax and advisory fields with cutting-edge digital technologies,
and provide society and companies with new insights andknowledge with high added-value.
Here, we introduce four specific digital solutions.

01 Visualization of supply chain datalatent insights in
02 Discoverlarge numbers of documents

KPMG Japan combined the professional insights we have

KPMG Consulting provides operational optimization consulting

cultivated through our audit, tax and advisory services withservices utilizing an AI solution, KNIGHT (Knowledgeable Integrated

cutting-edge technologies such as blockchain, IoT, and data analytic

Graphic Transformation).

tools and launched “KPMG Origins”, a platform enabling theKNIGHT utilizes natural language processing technology to analyze avisualization and history tracking of supply chain data. This platformlarge number of natural language documents, determine lateral

was developed with the aim of demonstrating to consumers therelevance across topics, and provide visualization in graphic format.

reliability of production control of the entire distribution channel ofFor example, KNIGHT analyzes technical documents such as weekly

products in international transactions, and improving thereports and technical reports that have been accumulated from thecompetitiveness of producers and companies.

past in the research and development field of the manufacturing

Using KPMG Origins, consumers can track historical informationindustry, and comprehensively visualizes technologies and past

such as the place of production and transportation status ofproblems related to research issues. This allows the prevention of any

products down to the smallest distribution unit, and can purchaseomissions of considerations in the downstream process and the

products with a sense of security. In addition, producers andupstream process that may have a significant impact on a company,

companies can differentiate their services by providing accurate andif problems are discovered after a product has been released to thehighly transparent information, and build relationships of trust withmarket. Utilizing KNIGHT makes it possible to visualize theconsumers, for example by preventing counterfeit sales, thereby“translated” content of large numbers of documents in a readily

increasing revenue and improving branding. Whereas conventional

understandable way, and enables sophisticated decision-making in thehistorical tracking systems are centralized, KPMG Origins employs

upstream manufacturing process.

a decentralized system utilizing blockchain to secure more reliable

Nowadays, by acquiring and recognizing the value of data outside of

information and reduce the operational burden.

company documents, data that exists in natural language form, suchas those found in internet news articles, on social media, in administrativeand patent documents, it is possible to enhance human decision-making
and, ultimately, corporate management decision-making.

1

Ensuring reliability
through digitalization

Information sharing is seamless withdigitalization, and reliability of the entire
supply chain is improved.

2

Visualizing data
all at once

Data across the supply chain can be
accurately grasped, enabling smooth
information sharing.

3

Ensuring datatransparency andintegrity

Blockchain technology is used toirreversibly store data and ensure
extremely high reliability.

Large number of documents and reports

Internal documents

Large number of documents (natural language)↓
Graphic format

Stakeholders′ existing systems
Retail store Consumer
Logistics
Warehouse
Customs
Delivery
Quality
QR code/Production
appealmanagement Anti-counterfeit control management management clearance/ management POS systemvarious permits systemsystemsystemfunction
systemData linkage (API linkage, etc.)

Ensuring high transparency and integrity of data on a blockchain platform

KPMG Origins

17

External documents

Conversion by AI

Visualization in graphic format
Advantages provided by graphing●

Intuitively understanding the dependencies of complex and wide-ranging
topics contained in a large number of documents●

Going beyond the limits of human cognitive ability, in terms of probing, lateralanalysis, and switching of perspectives for a large number of documents●

Going beyond the limits of human comprehension of information
by utilizing the characteristics of the graph structure© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG′s view of the future of
03 taxmanagement

04 Digital audit initiatives

KPMG Digital Gateway is a platform that integrates tax and legal

In 2018, KPMG Japan developed a machine learning model thattechnologies built on Microsoft Azure. Utilizing KPMG’s machinequantifies the risk of corporate accounting fraud (fraud risk) basedlearning, data analysis, visualization, AI technology, and the likeon past fraud cases and restatements.

makes possible not only cross-border tax management, but alsoThis model uses unique algorithms based on financial andthe visualization of enormous amounts of data accumulated in a

non-financial data for the past 10 years or more and information oncompany in a form required by management and tax personnel.

the occurrence of fraud to output the level of risk for each type ofDigital Gateway has workflow management and reporting functions

fraud. KPMG AZSA Quality Control Headquarters and audit teams

for tax operations, and can also build a dedicated site customized

use a fraud risk identification support tool that incorporates thisaccording to the needs of an individual company. In addition, bymodel in order to identify financial statements for which thecollaborating with KPMG’s tax professionals through a dedicatedprobability of fraud occurrence is high and perform appropriate

site, optimized tax management can be achieved for each company.

audit procedures in response.

Implementing Gateway will enable optimized tax management

We also utilized AI/machine learning to develop a model forwhile creating valuable insights, and pave the way for new

detecting fraudulent accounting at the account level as a joint

tax strategies.

research initiative with Hitotsubashi University, and acquired a—Fraud risk detection model

patent for the model in February 2020. Through the use of thispatented technology, we can refine and accelerate the identificationof fraud risk thus enabling a timely audit response.

Managing progress of tax operations
at affiliated companies worldwide

Workflow of tax operations
at affiliated companies worldwide❶ Model creation❷ Data input

Learns relationships
between accounts from data

Financial/non-financial data

Algorithm
Supervised Learning
Information regarding any pastoccurrences of fraud

Financial/non-financial data

Cost ofsales
Accounts
payableNet
sales

Variables/indicators

SGA

Accounts
receivable

Variables/indicators
Unsupervised Learning

MachineCalculation of degree of abnormality of accountLearning ❸Financial/non-financial data method：Graphical Lasso

Breakdown of taxable expenses
of affiliated companies

Screen showing organizational structureof the company

Variables/indicators© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

1位
2位
3位
・
・
・
・
・

売上
原価

売上高

買掛金

販管費

売掛金

売上
原価

売上高

買掛金

販管費

売掛金

KPMG Japan Our Story 2020/ 21

18

Quality

Message

Ensuring steadfast quality

Head of Audit

Takuji KANAI19

KPMG Japan is, at its core, an audit firm and tax accounting

The advent of the New Normal era brought about by thefirm. The audit firm’s mission is to ensure the credibility of

COVID-19 pandemic has accelerated the transition to afinancial statements, while the tax accounting firm’s

digital society, and is significantly changing not only the

mission is to help clients fulfill appropriate tax obligations.

business model of companies and the way people work,

As an accounting firm that bears this social responsibility,

but also society as a whole in its traditional form.

KPMG Japan pursues ever higher quality in all of our

KPMG Japan is promoting initiatives to take advantage ofservices including advisory. In this way, we contribute to

the latest IT technologies to enhance quality in each of ourincreasing value both for society and for our clients.

audit, tax and advisory functions, and consistently ensure

We have always made judgments based on criteria andhigh quality even in these times of rapid changes.

ethics that are recognized by society as fair and

To address such new changes, we will provide high-quality

reasonable, while maintaining a high degree of expertiseinsights in anticipation of the future to our clients andand integrity and complying with a strict set of rules. We

society. We believe our passion for and commitment tohave also ensured the independence of our audit services

quality will contribute to the robust

and have maintained and enhanced the quality of all

future growth of clients and sustainable development

services that we provide.

of the economy.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Audit Quality
Audit Quality is the source of
public trust at KPMG AZSAManagement′s approachto addressing risks

Addressing changing
audit needs

At KPMG AZSA, we regard maintaining audit

COVID-19 has not only had significant impact

With the acceleration of borderless andquality as our top priority. We relentlesslyon the business environment for companies,

digitalized businesses, there areseek to enhance audit quality in order tobut has also brought about major changes innever-ceasing cases of fraud by companies,

meet the expectations of society. Audit

our social structure. In addition to potential

and the demands required of audits areteams provide high-quality audit services

risks that had previously been acknowledged,

increasing. We will promote the digitalizationthat are responsive to advances incompanies are now required to address newof audits, and work on providing audits withinformation systems, globalization and otherrisks. We will perform audits taking into

Insights that identify at the earliest stage notchallenges faced by Japanese companies.

consideration how management assesses

only accounting risks but also business risks

the impact of such risks on the futureand issues relating to internal control byof the company.

utilizing our knowledge and experience
gained as accounting and audit professionals.

AZSA
Quality

KPMG AZSA periodically issues a report, AZSA Quality, to explain
our management’s thoughts on enhancing audit quality and otherinitiatives so that our stakeholders, including participants in thecapital markets, can better understand us.

Tax Quality
Topics and issues relating to tax are

quality services tailored to clients’ needs.

of tax returns. KPMG does not merely

changing significantly in line with the

To foster true professionals and ensure we

perform clerical work in preparing

increasing complexity andcontinue to be the Clear Choice for ourtax returns.

internationalization of the businessclients, KPMG Tax Corporation provides

We engage in in-depth dialogues withenvironment, as well as the impact oftraining on technical skills and English asclients to identify potential tax-related risks,

COVID-19 on businesses and performance.

well as various soft skill trainings toand tax planning options, with the ultimate

At KPMG Tax Corporation, our tax

strengthen client focus andaim of raising clients’ corporate value.

professional teams, each of which has its

communication skills.

own field of expertise, address various

In addition to tax consulting, KPMG Tax

aspects of corporate management that

Corporation aims to provide high-quality

undergoes dramatic changes and offer highcompliance services including preparation

Advisory Quality
Commitment to enhancing
clients′corporate value

forming teams that comprise professionals

order to be the Clear Choice at all times. We

KPMG Japan will support the sustainable

For engagements of a certain scale, we

believe our stance of working closely with our

growth of our clients by developing solutions

appoint a quality control review partner, andclients to provide optimal solutions to theirthat address the New Normal brought about

for complex and sophisticated services anchallenges, even during the unprecedented

by COVID-19, while maintaining investments

engagement partner is assigned based oncrisis of COVID-19, is part of the Value thatin cutting-edge technology, the development

KPMG’s internal accreditation system.

KPMG Japan is known for.

of relevant experts, and a structure for providing

To be the Clear Choice for clients at all times,

consistent services on a global scale.

our professionals ask themselves:

In order to provide services with high“Am I contributing to enhancing client value?

added-value even in an environment of

What is necessary for the client to continue

uncertainty in markets and in business due to

growing in the mid- to long-term?”

COVID-19, we explore service provision

By constantly asking these questions, weapproaches according to client attributes andensure that our people are committed tothe scope and complexity of the engagement,

providing high-quality services.

We prioritize building trusted relationships
with our clients through the consistentdelivery of fair and high-quality services, in

who have the necessary expertiseand experience.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

20

Career

Head of People, Performance and Culture

Hiroyuki YAMADA

Message

Developing professional talent

21

KPMG’s Vision is to be the Clear Choice; in other words, toneeded to address such developments and will continue tobe chosen by our stakeholders, now and in the future, bystrengthen the latest digital capabilities among ourhaving each and every one of our people provide

professionals, while pursuing strategic investments inoutstanding services as true professionals.

technology development.

In order to achieve this, our people need to accurately

With remote working becoming more widely establishedidentify the changes our clients are facing and come up

due to COVID-19, there has been a significant change inwith appropriate solutions on their own initiative.

the attitude of our people toward productivity and the

We focus on the “Three O’s” – On-the-Job Training (OJT),

variety of ways of using one’s time. In an increasingly

Off-JT and Opportunities – and evolve the knowledge ofdiversified work environment, we will further develop

our professionals from simple information into wisdom

previously established systems and mechanisms, improvethat can be used to find solutions.

the work environment, and implement initiatives for

The trend of digitalization is expected to accelerate due torealizing diversity so that our people can work with athe spread of COVID-19, making the collection, analysis andsense of security and high motivation.

advanced use of data possible. We are in an era where insights

As management, we are determined to implement various

gained from utilizing such data create new added value.

measures on a systematic and continuous basis to achieve

We have assembled diverse talent with the digital literacy

our Vision to be the Clear Choice.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Audit Career
Human Resource
Development Principles
and the “Three O’s”

Fostering a growth mindset andeffective engagement conduct
among audit teams through OJT

Fusion of OJT and
Off-JT in a remote
working environment

KPMG AZSA has established basic principles

The pillars of the OJT basic policy are

In order to address decreasing face-to-face

for the systematic creation and maintenance(1) engagement conduct that enables the

OJT opportunities as a result of remoteof an environment that enables personnel toactive and appropriate communication withworking becoming more common in

acquire the expertise and skills necessary toclients that is necessary to identify and solve

response to COVID-19, we have been

provide high-quality services, thereby fostering

issues, and (2) audit work paper review,

implementing Off-JT initiatives tothe development of true professionals.

discussion, and feedback for training

supplement OJT, such as devising training

At KPMG AZSA, true professionals are

purposes. We believe that fostering a talentthat utilizes actual examples. In addition, wedeveloped through the “Three O’s,” namely:

development mindset in our people ishold team management discussions to think

OJT (on-the-job training), Off-JT (off-the-job

essential to achieve these goals.

about engagement operations in a remotetraining; practical and pragmatic training),

working environment, while revising ourand Opportunities (providing a wide range of“OJT mindset” to illustrate OJT guidelines inwork opportunities).

a remote working environment, andimplementing human resource development

True
professionals

measures such as introducing best practices.

on)
ati Principles
nd entpm f f- JT
O

Sel
f
KPMG AZS -stu
A´ d
s
OJ H
T

rowth Minds
d G esource et (F
Dev o
R
an
y man
elo u
u

Professional Base
Expertise Skills

Op

p ort u ni t yConceptual Diagram of Human
Resource Development

Tax Career
Hiring and fostering top talent

Providing opportunities to grow as a professional

At KPMG Tax Corporation, we are

We hold training on a regular basis that

We are also working to enhance the training

implementing initiatives to actively recruit top

strengthens our technical tax knowledge andprograms we offer in an online environment

talent regardless of whether someone islanguage ability in order to be able to tackle

in response to the New Normal era,already a Certified Public Tax Accountant or

any tax challenges faced by our clients. In

combining them optimally with OJT andnot. Specifically, we offer university internshipaddition, we provide the opportunity for eachconstantly evolving the environment for

programs for students to get a real sense of

professional to attend KPMG Tax Professional

fostering tax professionals.

the advanced expertise and international

Camp where they discuss awareness andnature of KPMG’s tax-related work.

their understanding of tax-related matters

Prospective employees also attend multiple

through various tangible scenarios thattrainings before and after formally joining theallows us to further hone our technicalfirm and are well-supported to develop theexpertise, client focus, and ability to work

expertise required as tax professionals.

as a team.

Advisory Career
Enhancing training systems
according to areas of expertise andinitiatives for career advancement

Keeping up with technology andimproving digital literacy

Developing global talent for
the long-term

COVID-19 has led to further uncertainty andDigital transformation (DX), a priority theme

There is an urgent need for professionals

complexity in clients’ businesses, andfor many companies regardless of industry,

who not only have language skills but alsotransformations are required in line withwill be further accelerated in the New

the ability to adapt to different cultures andsuch changes.

Normal. Given the essential need for a basic

communicate with the people of theseIn order to provide optimal solutions to clients,

understanding of digital technologies such as

cultures, in order to support our clients doing

we are enhancing the curriculum and training

AI, the cloud, big data, and blockchain, webusiness globally. We also promote talent

for each advisory service, in addition tohave created an original curriculum

development from a long-term perspective

strengthening training by industry and on the

introducing a program developed by KPMG

for new grad hires, fostering not only

latest trends such as digital. We also provide

International for all advisory professionals.

expertise but also soft skills.

advisory-related training to professionals

We are also promoting opportunities for our

engaging in audit work in order to address

people to be assigned to global projects or sent

new advisory needs, and have further improvedon assignment overseas, while giving utmost

the training we provide for soft skills to help

consideration to safety, in order to foster talent

individuals achieve growth at an individual level.

capable of executing cross-border projects.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

22Collaboration

Head of Advisory, Head of Clients & Markets

Masahiko CHINO

Message

Collaboration

Demonstrate our collective strength23

COVID-19 is an unprecedented crisis that has had acapabilities and trends in markets and competition.

dramatic impact not only on politics, socio-economics and

KPMG Japan combines the expertise of its audit, tax andculture, but also on people’s work styles, lifestyles andadvisory functions with the digital technologies andvalues. For many companies, the utilization of

platforms of KPMG Ignition Tokyo to support our clients intechnologies and big data is an urgent issue for theirsurviving global competition and achieving sustainablesurvival and sustainable growth in the New Normal era.

growth, including addressing geopolitical risks in the New

In an environment of constant changes and great

Normal and the tightening of regulations both in anduncertainty, we need to understand industry and other key

outside of Japan. Collectively, KPMG Japan will respond totrends in addition to macro trends and provide solutions to

the trust placed in us by society and our clients throughchallenges and obstacles through scenario analysis andcontinually providing solutions that match the needs of the

hypothesis testing in order to achieve a competitive edge

times and our clients at a global level by utilizing ourwhile observing market growth potential, the company’s

KPMG network.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Integrated service for development ofa New Normal SCM system

Five viewpoints to understand supply chain

In the past year, the expectations companies have for supply chains havechanged drastically. They suddenly find themselves faced with the major
mission of managing a company in a “with corona” environment, withincreasing geopolitical risks including tense US-China relations, revisions
being made on a daily basis to regulations and tax systems somewherein the world, and challenges including BCP, security, and ESG/SDGs.
For many companies, rebuilding “SCM (supply chain management) in a
New Normal world” is a top priority management issue. KPMG Japan
integrates the various expertise of each group company in operations,
governance risk, finance, tax, M&A, and business revitalization to support
the development of a New Normal SCM system for companies, as One
Team. We will elevate the issues that have been individually consideredwith the CSO, CFO, COO, and CIO/CTO to the CEO agenda, and design
integrated solutions to support rapid implementation on a global scale.

Enhancing performance from five viewpoints①Quality ②Cost ③Delivery④Management ⑤Environment

Four layers of reform① Supply chain strategy② Reorganization of businessbases and partners③ Process reform④ Infrastructure development

Operations
Risk
Managing supplier risk,
Tax affairs
BCP, addressing relevant governanceSupplyregulations, rebuilding
chain
governance, procuring
ESG, quality compliance,
strengthening regional
Business
Deals
model
headquarters
ﬁnanceM&A, pre-deal, in-deal,
PMI, carve-out, synergy,
enhancing value

Digital

Impact on intergrouptransaction cost reduction,transfer pricing risk, income
distribution efficiency and tariffs

Business restructuring, management
structural reforms such as
establishing a holding company,
restructuring and consolidation of
corporations/bases, businesswithdrawal, business revitalization,business model, profit model

Building global tax governanceDue to a global response to BEPS, including a new documentation system
for transfer pricing, anti-tax haven measures, and the introduction andstrengthening of a tax system applied to an entire corporate group including
its overseas subsidiaries, there are demands for corporate activities to bemade more transparent in Japan and abroad. As a result, companies are
required to undergo transformations of an unprecedented scale in orderto implement global tax management and respond to tax risks. Also,with the trend of strengthened taxation on overseas companies such as
the introduction of digital taxation, global tax measures are becoming
more important not only in rapidly growing emerging countries but also
in an environment where major tax reforms are expected in countries
worldwide.At KPMG, our tax experts in Japan and offices around theworld, who have experience cultivated through the provision of various
tax management and international tax services, work together to respondto tax risks on a global scale, while contributing to achieving an effective
tax rate for an entire corporate group that is internationally competitive.

Effective tax rates for major countries(Source: KPMG International)

40

20

19.00

2020 effective tax rate

25.00

27.00

24.00

26.50

Italy

China Canada

US

28.00

30.00

30.62

Globalaverage23.79%

20.00

0
UK Russia

Incident and risk response
Companies may face a variety of incidents, including epidemics suchas COVID-19, which has led to an unprecedented crisis, natural
disasters such as earthquakes and floods, cyberattacks, fraud andscandals. In order to overcome crises caused by such incidents andrealize resilience management, KPMG Japan has established acomprehensive support system that brings together the high level ofexpertise its group companies have in each field. We will use thissystem to provide support according to each stage of a crisis, from theinitial response in the event of an incident, to an analysis of constantly
changing crisis events, through to management decision-making,restructuring, and rebuilding operations.

■(%)

France Germany Japan

Incident and risk response according to stage
Incident occurrence

Prevention/
discovery

Initialresponse

Response

Situation
control

Recurrence prevention/
recovery●● Forming an incident● Responding to● Planning recurrence
Establishing a risk
management system
response teamstakeholders
prevention measures● Investigating the facts ● Formulating a● Executing business
Monitoring andanalyzing risk indicators ● Risk/impact analysis
business plan
plans
● BCP
● Maintaining and● Pursuing liability/● Funding/resource planstrengthening operations disciplinary action●

Consistent support

KPMG′s subject matter experts〇 Risk Consulting〇 Restructuring〇 Accounting〇 Management Consulting〇 Forensic〇 Transaction〇 Tax〇 Corporate ﬁnanceComprehensive services for mitigating andadapting to climate change
KPMG Consulting and the Japan Weather Association will collaborate inproviding a comprehensive consulting service based on advanced forecast
analysis towards realizing both the mitigation of greenhouse gas
emissions that are a cause of climate change, and adaptation aimed at
reducing risks caused by climate change. By utilizing the know-how
cultivated by each party in our respective fields, we are able to provide
a broad range of consulting services including business plan and modeltransformations towards the realization of both mitigation against climatechange and adaptation aimed at reducing risks, and the advancement ofrisk management systems, and we will provide practical support to clients.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

24

Collaboration

KPMG′
s collective strength combined with diverse expertiseand global capability helps empower change.
Professionals in specialized areas across KPMG Japan’s member firms work together andshare industry-specific knowledge across sectors as each client engagement
demands a unique set of abilities spanning various fields of expertise and requires us toreach across organizational boundaries.
Only by collaborating can we support our clients in creating value and tackling the issues they face.
At the same time, this diversity of experience enriches our people and contributes to
the growth of our organization as a whole.

Industry

Contributing with industry knowledge
and deep insights

In order to contribute to the problem-solving of managements’challenges in the uncertain world of COVID-19, we will accumulate anddeliver industry insights in anticipation of the New Normal, byunderstanding major changes in industry trends. KPMG Japan is

Automotive

Technology,
Consumer
media andgoods/
telecommunications
Retailaccelerating such efforts as One Team by having our sector functions

ManufacturingLifesciences

Financeundergo major renewal. We will enhance the quality of services weprovide to audit and non-audit clients by strengthening our knowledge

Banking

Securities

Insurance

Assetmanagement

Real estate/ Leasing andREIT
other financein general

EnergyInfrastructure

Healthcare

Public sector

Educational
institutionsof each sector, and fostering talent who are familiar with the industry.
With each and every one of our professionals contributing to clients
through their industry knowledge and deep insights, we will become afirm known for the strength of our industry knowledge.

Corridor

Hospitality

Provision of advisory services whileworking with overseas firms as one team

The challenges faced by Japanese companies expanding
their overseas operations are becoming increasingly
complex. KPMG Japan has launched a corridor scheme withoverseas KPMG firms to support clients with global
operations. We use the term “corridor” as a reflection of ourdesire to support clients by connecting Japan seamlessly
with other countries and regions in a timely manner.
Currently we have established corridors with Thailand,
Singapore, Vietnam, the Philippines, Taiwan and India, andsupport local Japanese companies while strengthening thedevelopment of global talent within KPMG.

Thought Leadership

KPMG publishes timely reports on emerging businessissues as a global initiative, incorporating the results ofsurveys and research on such issues.

2020 Global CEO Outlook
COVID-19 Special Edition

25

The global energy
transformation

The road to everywhere:
The future of supply chain

Key cyber security
considerations for 2020

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Collaboration Demonstrate our collective strength

GJP

Global Japanese Practice as the core of our global capabilities
KPMG does not work in silos; Audit, Tax and Advisory achieve borderless and seamless collaboration across functions
and services. By organizing the best teams we can send on the field, we mobilize for each client our collective
strength based on various areas of expertise and global capabilities. We support and catalyze our clients’ value creationand deliver solutions to their challenges.

The Global Japanese Practice (GJP)
is our global network that assists
Japanese companies to expand andsucceed overseas.
Expats from KPMG Japan as well asJapanese-speaking professionals
based in 38 countries and in 91 cities
provide a wide range of services incooperation with other KPMG
member firms.

KPMG Japan

Europe, Middle East
and Africa
about

80

peopleAmericas

Asia Pacific

about

400

about

people300

peopleNumbers above are Japanese-speaking professionals(As of June 30, 2020)

Europe, Middle East and Africa

Asia Pacific

The Americas

GJP in this region has its head in London and

For the rapidly growing ASEAN, China and India

The Americas region includes the United States,

manages services to subsidiaries of Japanese

economies, a sub-region head has been

Canada, Mexico, Chile, and Brazil. The head of thecompanies in the United Kingdom, Germany andappointed for each. In Oceania, East Asia (other

Americas GJP is based in New York. KPMG has

other major countries in Europe, as well as in thethan Japan) and South India (including

worked for over 40 years as a pioneer supporting

Eastern Europe, the Middle East and Africa

Bangladesh and Sri Lanka), we are expanding

Japanese companies in the United States, where

regions. Concerning the ongoing challenges ofour range of services to subsidiaries ofmore than 280 Japanese professionals are

Brexit, the KPMG Brexit and EU response team,Japanese companies. These services include

currently located. The head of GJP for Latinwith members based in Japan, the UK andentry into new markets and expansion ofAmerica is based in Brazil and provides assistance

Belgium, are in close touch with the people andexisting business lines.

to business development of subsidiaries oforganizations behind this change, which hassignificance for all our clients. Sub-region heads
are assigned to cover the Middle East and Africa,
Central and Eastern Europe, and CIS for
delivering assistance specific to the sub-region.

KPMG International
As of September 30, 2020

Global Japanese Practice (GJP)
As of June 30, 2020

Japanese companies within the sub-region.

KPMG′s global network

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory
services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working inmember firms around the world. Each KPMG firm is a legally distinct and separate entity and describes
itself as such.

Europe, Middle East and Africa

Asia Pacific

The Americas

Total

Personnel

114,725

47,54264 , 615

226,882

Locations

106

20

20

146

Japanese speakers

80

400

300

780

24cities, 17countries

39cities, 16countries

28cities, 5countries

91cities, 38countries

Locations© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

26

Management Committee Members/Governance Structure

Governance Structure
KPMG Japan stands on the foundation formed byan audit firm and a tax accounting firm. Our audit
firm is committed to contributing to the sounddevelopment of the economy by ensuring thecredibility of financial information from an independent
point of view, thus ensuring fair corporate activities
and the protection of stakeholders. Our tax accounting
firm’s mission is to live up to the trust placed in us
by taxpayers and ensure, from an independent andfair-minded position, that tax obligations are fulfilledappropriately. As a professional firm that bears thissocial responsibility, member firms of KPMG Japan
provide advisory services to satisfy the needs ofclients and society and achieve Our Vision of being
the Clear Choice.

Management policies of
the KPMG Japan Management Committee
The KPMG Japan Management Committee comprises
representatives from the major member firms of KPMG
Japan including KPMG AZSA LLC, KPMG Tax Corporation,

Chairman, KPMG Japan
Chairman, Global Japanese PracticeCEO, KPMG Japan
CEO, KPMG AZSA LLC

Toshiya MORI

Hiroyuki TAKANAMI

A board member of KPMG International
since 2018, Toshiya has extensive
experience in advisory services related
to various management issues andaudits of global companies.

Hiroyuki has many years of involvementin audits and providing problem-solving
support for megabanks andfinancial companies.

Head of Audit

In charge of Advisory
President, KPMG Consulting

Takuji KANAI

Masahiro MIYAHARA

Takuji has extensive experience as anaccountant in both Japan and the UnitedStates, and has successively served as
an engagement partner for a leading
global company in Japan. Also serves as
Head of Audit, KPMG Asia Pacific.

Masahiro serves in his current role since
July 2017, having provided consulting in awide range of fields including business
transformation for global companies inJapan and overseas, and ERP, IFRS, andinternal control implementations.

Head of People,
Performance and Culture

Head of Financial Services

Hiroyuki YAMADA

Yutaka TERASAWA

Hiroyuki engaged in audits of various industries
including real estate and automobile manufacturers,
in addition to financial institutions such as megabanks and major insurance companies.
Representative of Asia and Japan on the Global
Public Policy Committee.

Yutaka is responsible for audits for a wide
range of financial institutions, including
megabanks, major securities companies,
life insurance companies, non-banks, andregional financial institutions.

KPMG Consulting, and KPMG FAS. The Committee
discusses and decides on the collaborative structure used
by KPMG Japan as well as material matters pertaining to
the management of the firms, including talentdevelopment, service improvement, and quality control.
In this way, we are able to pool all of the available
resources of KPMG to deliver the best possible services
that meet our clients’ management requirements.

KPMG Japan′s governance
As an accounting firm with a public interest mission, it isour policy not to simply seek profit but to provide services
that contribute to the sound growth of clients and live up
to the trust placed in us by society. This policy is not
limited to audit and tax compliance, but applies to all of
our services.
In order to live up to the high expectations for our firm inthis constantly changing environment, we are continuallyseeking the ideal group governance model.
Provision of non-audit services may cause a breach of
independence where we also provide audit services or aconflict of interest between non-audit services. To avoid

Head of Quality and Risk Management

Chairman of the Senior Review Board,
KPMG AZSA LLC

these situations, we continue to strengthen firm

Hideaki KOYAMA

Eiji MIZUTANI

governance and use Sentinel, KPMG International’s

Hideaki has been responsible for
quality control since 2006, while
concurrently serving as anengagement partner for the audits of a
global company.

Based on his experience working
overseas and auditing SEC-registeredcompanies, Eiji plays an important role in
our audit firm as Chairman of the Senior
Review Board.

proprietary global conflicts and independence
checking system.

27© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Management Committee(KJMC)

Audit
CFO

COO

Toshihiro OTSUKA

Mitsugu DOI

Involved in audit engagements for global
companies both in Japan and overseas,
Toshihiro has successively served as asteering committee member of KPMGInternational and KPMG Asia Pacific.

Mitsugu provides IT advisory to many
major clients utilizing his experience ofworking at an international financial
institution and foreign system consulting
company. Currently serves as Head of ITS.

KPMG Japan
Management
Committee(KJMC)

Advisory

Head of Tax, Senior Partner,
KPMG Tax Corporation

Head of Advisory, Senior Executive
Board Member in charge of Clients & Markets
Representative Partner, KPMG FAS

Yuichi KOMAKINE

Masahiko CHINO

Yuichi was appointed as the Head of Tax
in 2016. A leader in international tax
services with extensive overseas
work experience.

Masahiko has a wealth of experience invarious advisory services relating todomestic and cross-border deals.

Tax

Agenda of the KPMG Japan
Management Committee
July 1, 2019 – June 30, 2020

16%

16%

By topic21%

28%

Deputy Head of Tax,KPMG Tax Corporation

Head of Deal Advisory
Representative Partner, KPMG FAS

Yuichi MIYAHARA

Hikaru OKADA

Yuichi has experience with cross-bordertransactions of multi-national companies,and currently provides tax advisory
services to HR departments in
multinational companies.

Hikaru has many achievements inadvisory, business valuations andstructuring services as a financial
advisor relating to M&A deals both inJapan and overseas.

19%
Developing talentMarketing, CSR

Strategy

Governance andrisk management

Performance andbusiness planning

5%66%
By geographic
area

29%

Head of Kansai Area and Osaka Ofﬁce
Managing Partner, KPMG AZSA LLC

Head of Tokai Area, KPMG AZSA LLC

Daisuke HARADA

Michitaka SHISHIDO

Daisuike has extensive experience providing
consulting services relating to IPO, M&A,
and corporate revitalization, and is currently
involved in audit engagements for leading
Japanese companies headquartered in the
Kansai area.

In addition to being involved in audits
including global and group audits forvarious industries such as manufacturing,
pharmaceuticals, and retail, Michitaka isalso engaged in M&A deal advisory.

Japan

GlobalAsia Paciﬁc

KPMG Japan provides services in the three areas of Audit, Tax,and Advisory, with member firms working in harmony as one,under an efficient and disciplined management structure.
© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

28Service Line

Promotion of information technologies within thebusiness has eliminated restrictions of time and space on
economic activities and taken corporate activities to a new level.
Connecting all information in a network has sharply reduced thecost of information necessary for decision-making,thus making accurate information and credible insights more valuable than ever.
KPMG Japan provides audit services to ensure the credibility offinancial information, tax services to promote fair tax practices andcontribute to trust in society, and advisory services based on
credible insights to clear a way forward in
an increasingly complex society.

Index Map

29

30

Audit

31

Tax

32

Advisory© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

AuditTax
Advisory

Audit

KPMG AZSA LLC
Foster overIn recent years, society has come to expect not only financial information,
but also credibility and transparency from corporations regarding their activities.
The scope of assurance engagements has therefore been expanding.
With KPMG AZSA’s financial audit services at our core, KPMG Japan also
provides assurance services for areas including internal control,
IT systems and sustainability related information.
By providing credible services related to financial and nonfinancial
information, we contribute to the growth of clients and the economy.

KPMG Japan’s initiative for social value creation

Advanced data analytics and use in advisory services
KPMG AZSA is expanding the introduction of data analytics in ouradvisory services based on technologies and insights gained
through the digital transformation of our audit services.
We have launched a SaaS (Software as a Service) financial data
analysis service called “Financial Data Analytics (FDA)” in July 2020
as a first step. The “subsidiary analysis,” “journal analysis” and“expense analysis” modules currently released identify signs ofabnormal transactions based on financial data analytics, and can beused to strengthen control functions or supplement check
functions. The provision of objective judgments and insights gained
through data analytics can also lead to initiatives for enhancing
efficiency and making other improvements in operations. We will
support an increasingly sophisticated accounting and financefunction through the utilization of our FDA service.

2,500

digital talent professionals
by June 2023

Development of digital talent＊＊Professionals at the core of promoting digitaltechnologies in audit engagements

Service Portfolio
Audit under the Financial Instruments and Exchange Act

Statutory
Audit

Audit under the Companies Act
Audit of Financial Statements prepared in accordance with
the International Financial Reporting Standards (IFRS)
Audit of financial statements under SEC standards
Incorporated administrative agency audit
Incorporated educational institution audit

Credit union, workers′ credit union, credit cooperative audit
Labor union audit

Investment Limited Partnerships (ILPs) audit
Special Purpose Company (SPC) audit

Non-statutory
Audit

Financial statement audit of companies to which statutory
audit is not applicable
Audit in accordance with the Financial Instruments andExchange Act for the purpose of public offering
Audit of financial statements prepared in accordance withspecial purpose framework
Audit of single financial statements and specific elements,
accounts or items of a financial statement
Systems audit/project audit

Assurance

Assurance engagement other than auditor review of historicalfinancial information
Assurance engagement for internal control concerning
fiduciary obligation
Information security verification services
Assurance engagement for sustainability reporting

Our Story -- Audit 2020

Our Strength01

A quality control system that clarifies roles andresponsibilities and enables dissemination of management
policies throughout the organization (Four Defense Lines).

01

Delivered audit services and demonstrated expertise andprofessional skepticism to respond to various risks
that companies face.

02

Initiatives centered around KPMG Ignition Tokyo with theobjective of using cutting-edge technology foradvanced data analysis.

02

Improved the effectiveness and efficiency of audit operations
by adopting audit methods driven by Data & Analytics.

03

Use of KPMG′s global network and diverse professionals
who can support the globalization of our clients.

03

Established necessary audit infrastructure to allow judgments
to be made within Japan, which includes expertise on IFRS,US GAAP and Japan GAAP.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

30Service Line
Audit
Tax
Advisory

Tax

Tax Reimagined Services＊
Talent expansion plan

KPMG Tax Corporation
KPMG Social Insurance and Labor Advisor Corporation

The global business landscape is continuing to undergo tremendous change andcompanies are ever more exposed to new challenges such as measures taken by tax
peopleauthorities to address aggressive tax avoidance by multinational corporations. In
70addition, the impact of COVID-19 has driven many companies to review their supply
50
chains and restructure their businesses.
30
By drawing on not only our Japan network but also our tax professionals from KPMG’s
2020
2021
2022
2023
global network, we are dedicated to helping our clients succeed and are passionate
about providing comprehensive advice. Using our understanding of governance and＊Refers to the reconsideration and restructuring of thetax function, an essential part of creating a global tax
our deep industry knowledge, we help clients stay competitive and compliant.
management structure in Japanese companies.

90

KPMG Japan’s initiative for social value creation

Ten Things to Do to Achieve Global Tax
Management guidelines for Japanese companies
to solve challenges in the global tax environment
For Japanese companies accelerating the expansion of theirbusiness overseas, the establishment of a global tax management
system is an important and ongoing management issue. KPMG
Tax Corporation regularly publishes an online newsletter titled“Ten Things to Do to Achieve Global Tax Management” which
provides guidelines for headquarters regarding tax planning, tax
risk management, and other tax issues to help support the tax
departments of Japanese multinationals understand what theyneed to address in the current environment.
Furthermore, KPMG International publishes the Global Tax
Benchmarking Survey report assessing the current status andfuture outlook of tax departments worldwide, which offers useful
information regarding the challenges and opportunities, such as
the scope of duties, structure and budget of the tax department.

Service Portfolio

Addressing BEPS＊ issues through
KPMG′s international tax andtransfer pricing services
Following the OECD’s fundamental review of global tax rules,
multinational companies are required to submit country-by-country
reports, which could increase the risk of double taxation. While theappropriate control of tax-related risks is a key issue, many companies
in Japan do not have a clear understanding of their overseas
subsidiaries’ tax status resulting in a lag in the implementation of a
global tax governance policy. Going forward, it is only a matter of time
before tax authorities set up an information network globally andcompanies’ profit and loss and tax burden in each jurisdiction becomestransparent. In such an environment, the proper handling of BEPS
issues will present a critical challenge for companies to become truly
global. At KPMG Japan, we help Japanese companies build a global tax
governance system which is spearheaded by their headquarters inJapan. We support clients to enhance their management process andhelp them succeed amidst intense international competition.
International tax

Transfer pricing

Domestic tax

M&A

Real estate transactions

Global mobility

Finance & technology

Outsourcing＊BEPS : BEPS or Base Erosion and Profit Shifting refers to multinational companies′
tax avoidance strategies on the basis of national taxation. As BEPS is regarded as afactor that could threaten the credibility of tax schemes, international measures arebeing carried out to prevent it.

Our Story -- Tax 2020

Our Strength

31

01

Our capabilities in providing cross-border services
by utilizing KPMG′s global network.

02

A wealth of top-class tax professionals withexpertise in each specialized area.

02

Increased international tax and transfer pricing services to
respond to the growing importance for multinationals to
address BEPS.

03

Provision of practical tax advice with cutting-edge
IT technology in accordance with the particularneeds of clients.

03

Provided tax cost optimization services in relation todevelopment/reorganization of a supply chain whichtakes account of customs duties and other indirect taxes.

01

Expanded M&A related services in line with an increase inoverseas expansions and cross-border transactions
by Japanese companies.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

AuditTax
Advisory

KPMG AZSA LLC

Advisory

Cyber Security Service

KPMG Consulting Co., Ltd.

Headcount growth and future expansion plan

KPMG FAS Co., Ltd.
KPMG AZSA Sustainability Co., Ltd.

200

KPMG Healthcare Japan Co., Ltd.
130

KPMG Japan’s advisory services comprise three service groups:
Risk Consulting, Deal Advisory and Management Consulting.
As our clients face challenges and the need for transformation in the face ofan unprecedented crisis for humankind brought about by COVID-19,
our experts across various fields work as one in providing optimal
solutions through our global KPMG network to support the sustainablegrowth of our clients.

KPMG Japan’s initiative for social value creation

Introducing our incubation division
supporting university-initiated startups
The trend in recent years of many young and talented people
aspiring to start their own business is expected to bring about majorchanges in the structure of corporate society in the future.
The demand is increasing for universities, which have been
responsible for higher education and basic research, to support“social implementation” for students to apply the seeds sown by
their education and research to the solution of social issues.
University-initiated startups are on the rise year by year through theestablishment of an organization for utilizing industry-academia
collaboration, entrepreneurship funds and intellectual property.
Universities have many entrepreneurial students and researchers,
revolutionary technologies, and seeds of innovation, and there are
expectations for university-initiated startup companies to solve
social issues as a driving force for the future of Japan’s economy.
Fostering startup companies and promoting open innovation are
also positioned as important national policies.
We have established an “incubation division” to respond to thesocietal requirement of supporting the creation of social value
through innovative technologies, using the trust society has placedin us as a foundation to gain the confidence of startup companies
by supporting their management and operations.

We provide one-stop support to address our clients′ issues basedon an organic collaboration by our experts in relevant service fields
and industries and through utilizing our KPMG global network.

110

50
20

2015 2016 2017 2018 2019 2020 2021

Advisory Service Framework
Deal Advisory
We provide comprehensive one-stop support needed frompre-deal to post-deal for M&A advisory and business portfolio
restructuring to assist clients in revitalizing their businesses. We
also provide services relating to the formulation andimplementation of growth strategies.

Management Consulting
We utilize the latest technologies to support the digitaltransformation of our clients’ business models and operations.
We also provide comprehensive support covering a wide rangeof client needs – from planning business operations, digitalstrategies, and business transformations including supply chain
optimization, to designing organizational and personnel systems
that support the rebuilding of business management systems tosuit new workstyles, and proposals on how to use IT andsystems to achieve the optimal effect of each of these services.

Risk Consulting
We provide practical know-how regarding potential risks togrowth and the smooth operation of clients’ business. This
includes challenges related to the increasingly complex financial
accounting function, risk management, compliance, internal
control and audits, cybersecurity and BCP. We also supportclients in building and implementing optimal global groupmanagement structures.

Our Story -- Advisory 2020

Our Strength

01

100

people14001

Our initiatives responded to the various needs of clients
expanding their business globally even during COVID-19.

02

We utilize the latest digital technologies to provide
comprehensive support for promoting our clients′ real
digital transformation.

02

We made active investments in cutting-edge digital technologies
such as AI, big data, the Cloud, and blockchain, which we utilized
to develop digital solutions and introduce services.

03

Our expert professionals provide services
offering high added value.

03

We utilized digital technologies to provide advisory services
addressing opportunities and risks clients face in
the COVID and post-COVID eras.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

32

KPMG IMPACT

Launch of KPMG IMPACT to provide comprehensive
support for corporate transformations in the era of sustainability

Many countries and regions view sustainability as a measure for revitalizing the sluggish
economy caused by COVID-19, and there have been dramatic efforts by corporations on
a global scale towards realizing a sustainable society.
Incorporating sustainability into management is now a core element of corporate strategy
beyond the framework of CSR, and is indispensable for enhancing corporate value,
securing finance and competent talent, and promoting the value of products and services.
KPMG IMPACT unites solutions for strategically high-priority areas by creating
an organization that brings together professionals with diverse expertise across countries,
firms and sectors, in order to support the sustainability management of global companies.

Geopolitical risk, digitalization, andLeaderMessagesustainability efforts are three key
elements that will shape the way

Masahiko CHINO Partner

business is done in the post-COVID

KPMG Japanera. In particular, sustainability needs

Head of Clients & Markets

Head of Advisory/

to be addressed on a global scale,and is a serious issue that raises thequestion of what will remain for future generations. KPMG
IMPACT is our response to the drastic changes in values that
accompany this issue — a declaration that KPMG will work
together as a global organization to resolve relevant issues.
KPMG IMPACT will be a platform to bring together solutions
scattered over a wide range of functions and regions.
We will classify solutions into five categories by issue and bring

Junichi Adachi

PartnerManaging Partner,
KPMG AZSA Sustainability, Co., Ltd.
Division Head of Accounting Advisory Services (AAS),KPMG AZSA LLC

them to the market as an effort to address the vital themeof sustainability.
Together with our clients, we will think about the impacts thatthe tide of sustainability flowing beneath all companies will
have on their businesses, and support our clients from multiple
directions by steering a future course with these impacts inmind. Like our clients, we will embed sustainability awarenessin our own services through KPMG IMPACT. Sustainability is at

Mina Sekiguchi

Managing Director

Head of Energy and Infrastructure,
Advisory Planning Department, KPMG AZSA LLC
KPMG IMPACT Project Leader, KPMG Japanthe root of all the services KPMG offers.

33© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG IMPACT Fi ve Pillars

Overview
Five pillars of sustainability-related solutions provided by KPMG IMPACT

1

Facilitating clients’ understanding and application• ESG strategy

of new changes in the business environment.

• ESG risk management

Supporting the development of responsible andsustainable strategies, business models,
operations and investments.

ESG and sustainability

2(Including human rights, e.g. conflict minerals)• Circular economy

Collaborating with the government, multinational• Modeling target investments

corporations, private companies and other• Providing public services

development agencies.
Supporting growth of society by measuring

Economic andsocial development• Ethical supply chain

impact, reducing vulnerabilities, and allowing(Healthcare, education system, sustainable infrastructure)• Resilient supply chain and logistics
management

economies to prosper.

• Responsible investment

3

Integrating ESG (Environment, Society,
Governance) KPIs into responsible investment,
fund procurement, insurance and corporate
finance strategies and processes.

• Responsible banking and capital markets• Responsible insurance• Responsible corporate finance• Responsible public finance

Sustainable finance• Climate risk

4

Driving business models, products and services• Renewables

that address climate change and to help clients• Carbon and green house gas emissions

reduce carbon emissions.

• Climate and green finance• Policy and regulation

Climate change anddecarbonization

5• True Value
Providing methodologies, tools and frameworks for• Impact measurement and reporting

improved tracking and measurement of• TCFD and climate risk reporting

non-financial information.

• Sustainability assurance

IMPACT measurement,
assurance and reporting© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

34

Citizenship/Inclusion & Diversity

Citizenship
KPMG Japan contributes towards the realization of a sustainable society
as a corporate citizen with the aim of enriching our society
and environment that support us,
while utilizing the knowledge and experience
we have cultivated through the provision of services as a professional firm.

Initiatives for the next generation in the educational field
By placing emphasis on the fourth UN Sustainable Development Goal (SDG),
quality education, KPMG AZSA provides pro bono activities aimed at
fostering the next generation of leaders from among university students andhigh school, junior high and elementary school students. To date, we haveprovided accounting and audit classes which allow students to understandthe way in which accounting knowledge is useful in society, as well as
entrepreneur classes to support members of the younger generation who
wish to solve social issues through business. We also collaborate with global
to hold “Global CyberDay,” a cyber security awareness campaign.

“Entrepreneur class” held in June 2019

Initiatives in the social field
KPMG Japan signed a partnership agreement with the Japan Blind Football
Association, and with the aim of helping to raise awareness about blindsoccer, has been holding the KPMG Cup Blind Soccer Club TeamChampionship since 2016. In addition to our special sponsorship of national
competitions thus far, since January 2020 we have also been supporting thestrengthening of the Japan Men’s National Team aiming to win medals invarious international competitions.
As an initiative for the next generation, we have also been making year-end
donations since 2011 to support the future of children in areas affected by
the Great East Japan Earthquake. We regularly make donations to funds set

＠JBFA/H.Wanibe

AXA × KPMG Blind Soccer 2020 Cup

up in Iwate, Miyagi, and Fukushima prefectures for children who lost theirparents to earthquakes and other disasters.

Initiatives to address environmental issues
KPMG is tackling climate change on a global basis both by supportingclients in their efforts to reduce CO2 emissions and by implementing similar
methods at KPMG member firms worldwide.
KPMG Japan also provides sustainability-related services, and is making aneffort to understand of the CO2 emissions created by our own business andworking to reduce emissions. We also hold educational activities for
employees to raise their awareness of various environmental issues
including climate change.

35

Efforts to conserve World Heritage “Kumano Kodo”© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Inclusion Diversity
At KPMG Japan, the promotion of Inclusion and Diversity (I&D) is an important management strategy
for strengthening our core business competitiveness and supporting our growth.
Based on our common goal of contributing to clients and society by having each and every one ofour diverse professionals provide high-quality services, it is our aim forour people to achieve their full potential while accepting and benefiting from each other’s differences.
We believe that ensuring diverse perspectives in an inclusive environment will be the basis forbuilding a team that can provide innovative and valuable services to clients and society,and developing our organization into one that is more sustainable and robust,which will lead to the growth of our people as individuals.

Diversity workshop for organizational reform
As part of the annual KPMG Japan Diversity Fair (an internal event for learning andexperiencing diversity), we held the Diversity Workshop for Organizational Reform for
management who are also in a position of promoting I&D in December 2019.
Thirty-five members of management from KPMG Japan firms attended the event andexperienced differences in position from the perspectives of majority and minority
through games and discussion.
Participants commented that they were reminded of the importance of thinking about confronting diversity not only as an issue
of individuals or organizations, but also as a structural issue of society, and that they would like to apply this approach toorganizational management in the future.

A workplace that demonstrates the individuality of our diverse people

Supporting social independence and self-actualization
In 2011, KPMG Japan established AZSA Office Mate (AZOM, see P.38) with the
purpose of providing a workplace that matched the abilities and aptitudes ofindividual persons with disabilities with their motivation to work, and supporting
their social independence by realizing stable employment through which they canexperience the joy of working and individual growth. Our staff at AZOM are working
daily to assist with administrative tasks at KPMG AZSA and affiliated companies.
There are many staff members who enjoy sports, including some who participate in
the National Sports Festival for People with Disabilities, competing in sports such as
swimming and athletics. Some athletes with disabilities have been selected as
Japanese national team players, and AZOM staff Yuki Iwata was commended as a
Meritorious Athlete in 2020 as a strong team player in the Japanese national teamfor T20 (intellectual disability) long-distance events.

“Eruboshi”
certification

KPMG Japan actively promotes training for fostering an inclusive corporate culture, as well as
the recruitment of talent with high aspirations and potential regardless of gender.
In recognition of these efforts, KPMG AZSA, KPMG Consulting, KPMG FAS, and KPMG Tax Corporation
have been certified by the Minister of Health, Labor and Welfare as an "Eruboshi" company with threestars, as firms that implement effective initiatives to promote the further success of women.
We will continue to promote not only the success of women, but also the realization of a workplacein which each and every one of our people accept and make full use of individual characteristics, andcan achieve their full potential.

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

36

Our Performance/Overview of Member Firms

Our
Performance

2,993
1,449

1,658

1,564

517

611

166

171

8,309

642

8,983

8,616

2,532

2,747

694

697

2,981
721

189

■ Advisory■ Advisory
765

782

June
2018

827

June
2019

■ Tax ＊1
■ AuditJune
2020

Revenue(hundred million yen)

679

June
2018

2,427

2,715

5,083

5,172

June
2018

June
2019

■ Tax

■ Audit

June
2020

June
2018

Number of Employees

735

703

416,888

June
2019

June
2020

June
2018

Number of Employees
Seconded Overseas

5,281

445,345

June
2019

June
2019

June
2020

Number of
Global Professionals＊2

456,634

June
2020

Aggregate Training Hours

50.49

51.50

50.26

June
2018

June
2019

June
2020

Average annual training hours
per trainee＊1：Tax service revenues included are for fiscal years from October 1 to September 30.

＊2：Global professionals are those who have overseas work experience, have been in global skill training courses, or are foreign nationals.

37© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Overview ofMember
Firms

KPMG International

KPMG is a global organization of
About KPMG
independent professional services firms providing Audit,
Tax and Advisory services. We operate in 146 countries
and territories and in FY20 had close to 227,000 people
working in member firms around the world.
Each KPMG firm is a legally distinct and separate entityand describes itself as such.

KPMG Japan(As of September 2020)
Revenues $US

Chairman

29.22 billion

Number of personnel

Toshiya MORI

226,882

CEO

146
Registration in London, U.K.

Hiroyuki TAKANAMI

Number of countries and territories

KPMG Japan Member Firms
KPMG AZSA LLC
CEO Hiroyuki TAKANAMI

With approximately 6,000 employees based in
major cities nationwide, we offer professional
services, including audit, various assurance
services, finance-related advisory services, and
IPO support. We also deliver services requiringa high level of expertise tailored to
sector-specific needs, including those for thefinancial, information/telecommunication/media,
manufacturing and public sectors.
KPMG FAS Co., Ltd.
Hikaru OKADA
Osamu MATSUSHITA
Masahiko CHINO

Representative
Directors

We support clients on their journey to achieving
sustainable growth through the enhancement ofmanagement operations and increasing enterprisevalue by providing services related to corporate
strategy planning, business restructuring and
M&A for the optimization of business portfolios,
revitalization of underperforming businesses andadvice relating to addressing corporate scandals.
KPMG Social Insurance andLabor Advisors Corporation
Representative Mayumi OGAWA

We provide advisory services such as thoserelated to labor and social insurance procedures,
application procedures for social security
agreements, and creation and review of labor
rules to Japanese companies expanding theirbusiness globally and Japanese subsidiaries offoreign companies. Our services are bilingual,offered in both Japanese and English.

KPMG Tax Corporation
Representative Partner

KPMG Consulting Co., Ltd.

Yuichi KOMAKINE

President & CEO

Masahiro MIYAHARA

Our tax professional teams offer bespoke tax
advice according to various business activities(corporate acquisition, restructuring, overseas
expansion, international tax, transfer pricing,
BEPS compliance, customs duty/indirect tax,
business succession, etc.), preparation ofvarious tax declarations, bookkeeping andpayroll calculations, to Japanese companies andJapanese subsidiaries of foreign companies.

We assist clients to transform business models
or improve overall management operations.
Specifically, we provide services related tobusiness strategy planning, improvement in
operational efficiency, profit management
capability, governance, risk management, IT
strategy planning, IT system and tool
implementation support, organization and humanresource management reform, among others.

KPMG Healthcare Japan Co., Ltd.

KPMG AZSA Sustainability Co., Ltd.

Managing Partners

Keiichi OHWARI
Jun MATSUDAManaging Partners

We provide business and financial services tothe healthcare industry, including the medical
and nursing care fields. Advisory services are
related to strategy, risk assessment, M&A,
finance and business revitalization.

We provide third-party assurance services forcompanies to raise the credibility of their
non-financial information. We assist companies’
pursuit of sustainability by supporting corporate
performance and risk control in thesustainability field as well as enhancement of
non-financial disclosures.

KPMG Ignition Tokyo Inc.
CEO

Junichi ADACHI
Kazuhiko SAITOAZSA Office Mate Co., Ltd.

Masayuki CHATANI

President

Our mission is to combine the knowledge of our
professionals cultivated through our audit, tax
and advisory services with the latest digitaltechnologies, and together with all entities of
KPMG Japan to support the business
transformation of companies accompanying
digitalization through developing common
foundations and solutions.

Michitaka SHISHIDO

In order to assist individuals with disabilities
achieve independence, AZSA Office Mate
employs individuals with primarily intellectual
disabilities as “office mates.” These employees
are responsible for work including preparation for
external seminars, printing and binding materials,
sorting and filing accounting documents, sortingand shipping of stationery for reuse, businesscard printing and restocking of stationery.

Editorial Policy Since 2015, we have been issuing KPMG Japan Our Story, which
reports on KPMG Japan’s shared principles and philosophy, as well as initiatives
whereby we can consistently respond to social and client expectations to provide morevalue as a group of professional firms dedicated to delivering outstanding service. This
report is prepared and edited with the principles of integrated reporting in mind.

Reporting Period
Performance data is provided for primarily the period of July 2019–
June 2020. In addition to reviewing the current state of the firm, the report also presents
our outlook for the years to come.
Publication date

Scope of the Report In principle, the Report focuses on KPMG Japan’s member
firms. Information and performance data of specific organizations are individuallydescribed. KPMG Japan’s member firms are listed above.

Contact Information KPMG JapanOTEMACHI FINANCIAL CITY South Tower 1-9 -7 Otemachi, Chiyoda-ku, Tokyo 100 - 8172
+81- 3 - 3266 -7562

January 2021

© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG Japan Our Story 2020/ 21

38

Contact us
KPMG JapanOTEMACHI FINANCIAL CITY South Tower
1- 9 - 7 Otemachi, Chiyoda-ku,
Tokyo 100 - 8172

TEL :+ 81- 3- 3266- 7562
home.kpmg/jp

home.kpmg/jp/socialmedia

The information contained herein is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee thatsuch information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should
act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2021 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law
and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee. All rights reserved. 21- 8004
© 2021 KPMG Tax Corporation, a tax corporation incorporated under the Japanese CPTA Law and a member firm of the KPMG
global organization of independent member firms affiliated with KPMG International Limited, a private English company limited
by guarantee. All rights reserved.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.