Alinco's Audit: Thirty-Six Years and One Matter

(3) 監査の状況, the audit status item of ALINCO INCORPORATED's annual securities report for its 56th fiscal year, March 21, 2025 to March 20, 2026, filed on EDINET on June 17, 2026, occupies pages 44 to 45 of 115. It names the auditor as 有限責任 あずさ監査法人, prints a continuous audit period of 36年間, thirty-six years, with a sentence saying the true period may be longer, names two engagement partners, counts the assistants as 公認会計士26名、その他54名, twenty-six certified public accountants and fifty-four others, and prints a fee table in which the filing company paid 44 million yen (US$0.27 million) for audit certification work in each of the two years shown. The independent auditor's reports at pages 109 to 115 carry one 監査上の主要な検討事項, one key audit matter: the appropriateness of the period to which the parent company's sales are attributed. This piece reads the item and the auditor's reports, and sets them beside the same pages of the 55th report, filed June 17, 2025, on pages 42 to 44 and 109 to 116 of 116.

The item has three numbered parts. ① 内部監査及び監査等委員会監査 covers internal audit and the audit of the audit and supervisory committee. ② 会計監査の状況, the status of the accounting audit, is lettered イ to ヘ: イ 監査法人の名称, the firm's name; ロ 継続監査期間, the continuous audit period; ハ 業務を執行した公認会計士, the certified public accountants who executed the work; ニ, which is headed 業務を執行した公認会計士 a second time and then 監査業務に係る補助者の構成, the composition of assistants to the audit work; ホ 監査法人の選定方針と理由, the policy and reasons for selecting the firm; and ヘ 監査等委員及び監査等委員会による監査法人の評価, the committee's evaluation of the firm. ③ 監査報酬の内容等, the content of audit fees, is also lettered イ to ヘ: the fee table, fees to the same network, other significant audit certification fees, non-audit services, the fee determination policy and the committee's reasons for consenting to the fee. The 55th report's item on pages 42 to 44 has the same three parts and the same letters.

イ prints 有限責任 あずさ監査法人, with a space between 有限責任 and あずさ as the report sets it; the heading of ロ in the fee part names the network as 監査公認会計士等と同一のネットワーク（ＫＰＭＧグループ）, the same network as the audit firm, the KPMG group. ロ prints 36年間 and then a qualifying sentence: 上記は、当社が新規上場した際に提出した有価証券届出書における監査対象期間より前の期間については調査が著しく困難であったため、有価証券届出書における監査対象期間以降の期間について記載したものであります。実際の継続監査期間は、この期間を超える可能性があります — the figure covers the period from the audit period of the securities registration statement filed when the company first listed, because investigation of the period before that was extremely difficult, and the actual continuous audit period may exceed it. The 55th report printed 35年間 with the same sentence. ２ 沿革, the history on page 4, lists the listings: 1993年３月 大阪証券取引所市場第二部に上場, listing on the second section of the Osaka Securities Exchange in March 1993; 2006年１月 東京証券取引所市場第二部に上場; and 2014年12月 東京証券取引所市場第一部銘柄に指定.

ハ names two partners, 浅野 豊 and 大橋 正紹, each with the designation （指定有限責任社員 業務執行社員）, designated limited liability partner and engagement partner. The same two names appear in the 55th report's ハ. The independent auditor's report on the consolidated financial statements, at page 109, is dated 2026年６月16日, addressed アルインコ株式会社 取締役会 御中, and signed for 有限責任 あずさ監査法人 大阪事務所, the Osaka office, by the same two partners; the 55th report's is dated 2025年６月16日 and signed by the same two at the same office. ニ prints 当社の会計監査業務に係る補助者は、公認会計士26名、その他54名であります, twenty-six certified public accountants and fifty-four others. The 55th report's ニ printed 公認会計士６名、その他14名, six and fourteen. Both sentences are given here as printed; in each year the sentence is the whole of ニ as extracted, and this piece does not go beyond the two sentences.

ホ, the selection policy, is one sentence: 監査法人の選定方針については、監査法人の品質管理、監査チームの独立性及び専門性と監査計画、監査報酬の妥当性と監査の有効性と効率性、監査等委員とのコミュニケーション、経営者等との関係、グループ監査等を評価したうえで、総合的に判断することとしております — the firm's quality control, the independence and expertise of the audit team and the audit plan, the reasonableness of the fee and the effectiveness and efficiency of the audit, communication with the audit and supervisory committee members, relations with management, and group audit, evaluated and judged as a whole. ヘ records the committee's conclusion: it 確認し, confirmed, the auditor's performance of duties, its independence and necessary expertise, the existence of an audit structure and the reasonableness and appropriateness of the audit plan, and 有限責任 あずさ監査法人が会計監査人として適切、妥当であると判断しております, judged the firm appropriate and reasonable as accounting auditor. Both sentences read the same in the 55th report.

③ イ, 監査公認会計士等に対する報酬の内容, is a table with two years across, 前連結会計年度 and 当連結会計年度, each split into 監査証明業務に基づく報酬(百万円), fees for audit certification work, and 非監査業務に基づく報酬(百万円), fees for non-audit work, and three rows down: 提出会社, the filing company; 連結子会社, consolidated subsidiaries; and 計, total. In the 56th report the 提出会社 row reads 44, −, 44, −; the 連結子会社 row reads −, −, −, −; and the 計 row reads 44, −, 44, −. So the filing company paid 44 million yen (US$0.27 million) for audit certification in the year to March 2025 and 44 million yen (US$0.27 million) in the year to March 2026, with a dash in every non-audit cell and every subsidiary cell. The 55th report's table on page 44 reads 43, −, 44, − on the 提出会社 row and 43, −, 44, − on the 計 row: 43 million yen (US$0.26 million) for the year to March 2024 and 44 million yen (US$0.27 million) for the year to March 2025. The current-year column of the 55th table and the prior-year column of the 56th table agree. ロ, fees to the KPMG group other than those in イ, ハ, other significant audit certification fees, and ニ, non-audit services to the filing company, each print 該当事項はありません, no applicable matters, in both years.

ホ of the fee part states the determination policy: 当社の監査公認会計士等に対する監査報酬の決定方針は、当該会計監査人の継続監査期間、監査体制・監査能力等を総合的に勘案して定めております — the fee is set with comprehensive regard to the auditor's continuous audit period, audit structure and audit capability. ヘ gives the committee's reason for consent: it heard the audit plan submitted by the auditor for the year and the views of the executives, examined 当事業年度の監査時間・配員計画及び報酬額の見積もりの相当性, the reasonableness of the year's audit hours, staffing plan and fee estimate, judged them appropriate, and gave the consent under 会社法第399条第１項及び第３項, Article 399, paragraphs 1 and 3 of the Companies Act. The auditor's report closes the loop on page 112 under ＜報酬関連情報＞, fee-related information: the fees for audit certification and non-audit work paid by the company and its subsidiaries to the firm and to members of its network are stated in (3)【監査の状況】 of the report. Under 利害関係, interests, the report states that between the company and its consolidated subsidiaries and the firm or its engagement partners there is no interest required to be stated under the Certified Public Accountants Act.

The 56th report's key audit matter is headed アルインコ株式会社の売上高の期間帰属の適切性, the appropriateness of the period attribution of ALINCO INCORPORATED's sales, in a two-column table on page 110 with 監査上の主要な検討事項の内容及び決定理由, content and reasons, on the left and 監査上の対応, the auditor's response, on the right. The left column opens with a figure: the sales recorded in the consolidated income statement of the group are 62,632百万円, 62,632 million yen (US$382.4 million), のうちアルインコ株式会社の売上高が重要な割合を占めている, of which the parent company's sales account for a significant proportion. It then cites the accounting policy note, ４．会計方針に関する事項（4）重要な収益及び費用の計上基準, and summarises it: the group manufactures, sells and rents temporary construction equipment, manufactures and sells aluminium products for housing and building sites and fitness equipment, and manufactures and sells electronic products, and recognises revenue over a period or at a point in time according to the business. The reasons given for a risk of misstating the timing of the parent's sales are two: 顧客は多岐にわたり、複数の契約条件が存在すること, customers are diverse and multiple contract terms exist; and 販売システムへの登録は一部手作業によって行われることから、販売システムへの入力を誤る可能性があること, registration in the sales system is partly manual, so there is a possibility of input error. On that basis the firm judged the matter 特に重要, particularly important, to the audit of the consolidated financial statements.

The right column lists the procedures under two headings. (1)内部統制の評価, evaluation of internal control: the firm understood the accounting policies for revenue recognition and their application, including the related controls, and evaluated the design and operating effectiveness of the controls in the sales recording process, 上長が根拠資料を確認して承認を実施する統制に特に焦点を当てた, with particular focus on the control in which a superior checks the supporting documents and approves the sales entry. (2)売上高の期間帰属の適切性の検討, examination of period attribution: sales selected by sampling were agreed to related evidence to confirm accuracy, and for sales recorded around the year-end date, transactions meeting certain criteria were extracted and their supporting documents examined to confirm the appropriateness of the period. The policy the matter cites is on page 62: for goods and products, revenue is recognised at delivery, when control transfers and the performance obligation is satisfied, ただし、商品及び製品の国内の販売については…出荷時点で収益を認識しております, except that domestic sales of goods and products are recognised at shipment because the interval from shipment to transfer of control is a normal one; construction contracts are recognised over time by an input method, the ratio of costs incurred to estimated total costs; and lease income within rentals is recognised under 企業会計基準第13号, the lease accounting standard. The consolidated income statement on page 55 lists, under 売上高, two lines and a total, each a printed figure in thousands of yen: 商品及び製品売上高, sales of goods and products, 44,924,969 thousand yen (US$274.3 million); レンタル収入, rental income, 17,707,133 thousand yen (US$108.1 million); and 売上高合計, 62,632,103 thousand yen (US$382.4 million). A year earlier the three printed figures were 43,810,187 thousand yen (US$267.5 million), 17,790,930 thousand yen (US$108.6 million) and 61,601,118 thousand yen (US$376.1 million). This piece does not add the two lines.

The 55th report's key audit matter was a different subject. Its heading on page 110 is 有形固定資産に係る減価償却方法の変更及び耐用年数の変更, the change in depreciation method and useful lives of property, plant and equipment. The left column recounts the note: the company and its domestic consolidated subsidiaries had used 定率法, the declining-balance method, for レンタル資産, rental assets, and changed to 定額法, the straight-line method, from that year; the useful lives, previously the same as those under the Corporation Tax Act, were changed to 経済的な使用可能予測期間, the estimated period of economic usability; and as a result 営業利益、経常利益及び税金等調整前当期純利益がそれぞれ1,333,495千円増加している, operating profit, ordinary profit and profit before income taxes were each 1,333,495 thousand yen (US$8.1 million) higher than under the previous method. The column explains why the matter was chosen: whether the change was justified rested on the presence of a change in the business environment, on the plans for adding rental assets under the medium-term plan, on the timing of the change and on the estimate of the usable period, 経営者の主観的な判断を伴うものである, matters involving management's subjective judgement; and if the content, reasons and effect were not properly disclosed, the comparability of the consolidated financial statements between periods could be impaired. The firm added that it judged the note on the change 利用者が連結財務諸表を理解する基礎としても重要である, important also as a basis for users' understanding of the statements.

The company's own note in the 55th report, at page 62 under （会計上の見積りの変更と区別することが困難な会計方針の変更及び会計上の見積りの変更）, gives the company's account of the same change. It names the rental asset: 当社グループのレンタル資産である建設用仮設機材につきましては、新型足場「アルバトロス」が大手建設会社で採用されるなど国内市場への浸透が順調に進み, the group's rental assets are temporary construction equipment, and the new scaffolding アルバトロス has been adopted by major construction companies and is penetrating the domestic market; it refers to the expansion of equipment centres and maintenance; and it dates the reconsideration to the drawing-up of the medium-term management plan whose first year was the year to March 2025. The segment note on page 85 of the same report prints the effect once more: the segment profit of レンタル関連事業 was 1,333,495 thousand yen (US$8.1 million) higher than under the previous method. The auditor's response in the 55th report's right column lists, under (1), analysis of the trend in rental asset additions and usage over past years, inquiries of management and reading of the medium-term plan and the addition plans, to examine whether the change was based on a change in the environment and whether straight-line better reflects the pattern of consumption of economic benefits, and whether the year was the appropriate year for the change; and under (2), recalculation of the effect on each level of profit after evaluating the accuracy and completeness of the base data, and examination of whether the content, reasons and effect were properly reflected in the note.

In both years the report on the separate financial statements handles the matter by reference. The 56th report's page 114 prints, under the heading 売上高の期間帰属の適切性, that the key audit matter to be stated in the separate report 実質的に同一の内容である, is substantively the same as the one in the consolidated report, このため、個別財務諸表の監査報告書では、これに関する記載を省略する, and is therefore omitted; the 55th report's page 115 does the same for the depreciation matter. The opinions are stated in the standard form. On the consolidated financial statements, page 109: 全ての重要な点において適正に表示しているものと認める, present fairly in all material respects. On the separate financial statements, page 113, the same words. On the internal control report, page 111: the report in which the company stated that its internal control over financial reporting as of March 20, 2026 was effective 全ての重要な点において適正に表示しているものと認める. One sentence of the basis-for-opinion paragraph differs between the years. The 56th report reads 我が国における職業倫理に関する規定（社会的影響度の高い事業体の財務諸表監査に適用される規定を含む。）に従って, in accordance with the ethical requirements in Japan, including those applicable to audits of financial statements of entities with high social impact; the 55th report's sentence reads 我が国における職業倫理に関する規定に従って, without the parenthesis. The desk records the two sentences as printed and does not know the reason for the difference.

Part ① of the item describes the other two audits. 内部監査 is carried out by 監査部, the audit department, under internal audit rules and an audit plan; the head of the department submits reports to the representative director and chairman, the representative director and president and the full-time audit and supervisory committee member, and the department also carries out the evaluation of internal control over financial reporting under the Financial Instruments and Exchange Act. The staff count is printed as of the filing date: 提出日（2026年６月17日）現在９名, nine persons; the 55th report printed 10名 as of June 17, 2025. Results are reported at a monthly audit report meeting attended by the full-time committee member, at a monthly meeting of executives, which the 56th report calls 営業本部会議 after an organisational change dated March 21, 2026 and the 55th report called 執行役員会議, and quarterly to the committee members and the other outside directors; significant accounting and financial matters detected are reported to the accounting auditor 指導、助言を得る, to obtain guidance and advice. The audit and supervisory committee is three directors: its chair 吉井敏憲, the full-time member, and two outside directors, 衣目成雄, a certified public accountant, and 野村新平, a lawyer. It met 13回, thirteen times, in the year, and each of the three attended all thirteen; the 55th report printed fourteen meetings, with 野村公平 and 勘場義明 attending four of four before their retirement on June 19, 2024 and 衣目成雄 and 野村新平 attending ten of ten after their appointment on that date. The committee's agenda, as printed, includes 会計監査人の選解任または不再任に関する事項や、会計監査人の報酬等に対する同意等, the appointment, dismissal or non-reappointment of the accounting auditor and consent to its fees.

Three other pages bear on the auditor. Page 31, item ｉ 会計監査人 in the governance outline, states that the company has an audit contract with 有限責任あずさ監査法人, printed there without the space, for the audit of the Companies Act financial documents and the Financial Instruments and Exchange Act financial statements, receives guidance on important matters as they arise, and that 監査結果は当社取締役会に対して報告されております, audit results are reported to the board; and that 会計監査人の監査に適時監査等委員が立ち会っております, committee members attend the auditor's audit as appropriate. Page 43 sets out the company's independence criteria for outside directors, of which item ６ excludes 当社グループの会計監査人又は会計参与である公認会計士（若しくは税理士）又は監査法人（若しくは税理士法人）の社員、パートナー又は従業員である者, a partner or employee of the group's accounting auditor; the page also names a second certified public accountant among the outside directors, 細川明子, who is not a committee member. Page 29 records that the company is a 監査等委員会設置会社, a company with an audit and supervisory committee, with seven directors who are not committee members, two of them outside, and three who are, two of them outside, and that the board met 16回 in the year.

The company's own list of estimates is a separate note written by the company rather than the auditor. （重要な会計上の見積り）, significant accounting estimates, on page 63 of the 56th report, is headed 住宅機器関連事業及び電子機器関連事業の有形固定資産の減損, impairment of property, plant and equipment in the housing equipment and electronic equipment businesses. It prints the carrying amounts: 住宅機器関連事業 3,029,902 thousand yen (US$18.5 million) at the prior year-end and 3,031,034 thousand yen (US$18.5 million) at March 20, 2026; 電子機器関連事業 2,561,147 thousand yen (US$15.6 million) and 2,351,476 thousand yen (US$14.4 million). The note states that both businesses 継続して営業損失を計上しています, have continued to record operating losses, the housing equipment business on fitness products and the electronic equipment business at the domestic subsidiary 東電子工業㈱, whose name changed to アルインコイーテック㈱ on March 21, 2026 by the note on page 6; that the company judged there were indications of impairment and tested; and that the undiscounted future cash flows were estimated on the basis of the next year's budget and 中期経営計画2027, announced April 3, 2024. The （会計方針の変更）note that follows on the same page records the application of 企業会計基準第27号, the standard on corporate, inhabitant and enterprise taxes, from the start of the year, これによる連結財務諸表に与える影響はありません, with no effect on the consolidated financial statements.

Method. The desk located the two annual securities reports in the EDINET document-list API for June 17, 2026 and June 17, 2025, retrieved the PDFs through the same API, and read them with pdfplumber: (3) 監査の状況 (pages 44 to 45 of the 56th report, 42 to 44 of the 55th), the governance outline (pages 29 to 31), the outside-director page (page 43), the history (page 4), the business description (pages 5 to 6), the five-year table (page 2), the consolidated income statement (page 55), the accounting policy and estimate notes (pages 62 to 63 of the 56th, page 62 of the 55th), the revenue and segment notes (pages 84 to 85 of both), and the independent auditor's reports (pages 109 to 115 of the 56th, 109 to 116 of the 55th). The fee tables and the two-column key audit matter tables were read with extract_tables and the columns matched to their printed headings; the fee table's current-year column in the 55th report was compared with the prior-year column in the 56th and agrees. Apart from the reference conversions to US dollars at ¥163.8 = US$1, nothing here is computed: no fee is divided by sales, no count is differenced, and the period is left as the company prints it. Firm and partner names are given in the Japanese form the reports print.