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Independent Auditor

Last updated : August 12, 2021

Activities of the Independent Auditor

NTT has appointed KPMG AZSA LLC as its Independent Auditor since 1985. The Independent Auditor maintains the level of coordination with the Audit & Supervisory Board and the Internal Control Office necessary to conduct appropriate audits. As part of this coordination, the Independent Auditor appropriately audits through reporting the audit plans and audit results to the Audit & Supervisory Board and working together with the Internal Control Office to establish systems for monitoring the status of oversight related to evaluating internal control systems for financial reports.

For the fiscal year ended March 31, 2021, the Independent Auditors who carried out the audit were Takuji Kanai, Kenji Tanaka and Masashi Oki, with 21 public certified accountants and 27 other staff assisting in conducting the audits.

In order to maintain the independence of the audit process, NTT also conducts appropriate rotations of KPMG AZSA LLC officers in accordance with the Certified Public Accountants Act of Japan, with lead engagement partners not being able to participate in audit responsibilities for more than five consecutive accounting periods, after which there is an interval of five accounting periods before such partners may participate again.

Furthermore, officers other than lead engagement partners may not participate in audit responsibilities for more than seven consecutive account periods, after which there is an interval of two accounting periods before such officers may participate again.

Nomination of the Independent Auditor

NTT believes that it is important to maintain and enhance audit quality while increasing audit efficiency. Based on this policy, the Audit & Supervisory Board evaluates Independent Auditor candidates from the perspectives of their independence and specialties and the appropriateness and adequateness of their auditing activities. The candidates that are approved by the Audit & Supervisory Board are then presented for voting at the Ordinary General Meeting of Shareholders. The Audit & Supervisory Board may choose to dismiss or not reappoint the Independent Auditor in any of the cases described in Article 340 (1) of the Companies Act based on a unanimous vote by all Audit & Supervisory Board Members. In addition, if the Board of Directors determines that it would be difficult for the Independent Auditor to perform proper audits, the Audit & Supervisory Board may propose a resolution to the Ordinary General Meeting of Shareholders that the Independent Auditor be discharged or that the Independent Auditor not be reappointed.

Description of Audit Fees

Compensation of Independent Auditor

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Category Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021
Compensation for Audit Services
(millions of yen)
Compensation for Non-Audit Services
(millions of yen)
Compensation for Audit Services
(millions of yen)
Compensation for Non-Audit Services
(millions of yen)
NTT 333 0 341 50
Consolidated subsidiaries 2,537 70 2,580 85
Total 2,870 70 2,921 135

Non-audit services for which NTT and its consolidated subsidiaries pay compensation to KPMG AZSA LLC, NTT's independent auditor, include services related to the preparation of comfort letters for issuances of domestic bonds and U.S. dollar- and Euro-denominated corporate bonds, and services related to verifying the status of the maintenance of internal control, on the basis of International Standard on Assurance Engagements No. 3402 (Assurance Reports on Controls at a Third Party Service Organization).

Compensation of the Same Network (KPMG Network) as the Independent Auditor (excluding the above "Compensation of Independent Auditor")

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Category Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021
Compensation for Audit Services
(millions of yen)
Compensation for Non-Audit Services
(millions of yen)
Compensation for Audit Services
(millions of yen)
Compensation for Non-Audit Services
(millions of yen)
NTT - - - -
Consolidated subsidiaries 2,236 197 1,970 209
Total 2,236 197 1,970 209

NTT and its consolidated subsidiaries pay compensation to KPMG AZSA LLC, NTT's Independent Auditor, and other member firms of the KPMG network for audit services and non-audit services.

Of these services, audit services provided by entities other than KPMG AZSA LLC consisted of audits of the financial statements of 332 overseas consolidated subsidiaries, and non-audit services consisted of the preparation of tax returns for 52 consolidated subsidiaries in Japan and overseas.

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