Business Process Library Q Business Process Management

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Three-piece set is a colloquial term indicating three tools for (Japanese) internal control reporting system: "business description document," "risk control matrix (RCM)," and "business flow diagram."


Overview of Three-piece Set

Internal Control Reporting System in (Japanese) Financial Products Trading Law requires internal control over business concerning companies' financial reports and obligates executive officers to evaluate internal control over processes concerning creation of financial statements and to submit the result as "internal control report." Three tools that are explained, in "execution criteria of evaluation and supervision concerning internal control over financial reports", as examples of documents to be submitted as a part of "internal control report" are called three-piece set. Specifically, the following three tools are included.

  • Diagrams to show business flow (Business Flow Diagram): This describes the procedure of business.
  • Business description document: This document explains the detail of business.
  • Risks and control over them (RCM): This is a matrix listing risks in business process and countermeasures against them.

Three-piece set is just an example and documents of these three formats are not necessarily required. However, some documents equivalent to three-piece set are definitely necessary for executive officers to select business process concerning reliability of financial reports and evaluate them.

Ways to Create Three-piece Set

There are two ways to create three-piece set: one is a centralized way, in which a project team is in charge of all documentation, and the other is a distributed way, in which each concerning department does it.

Centralized Way

The centralized way is effective in the following cases.

  • Ample manpower can be invested in a project team.
  • A single and massive project is worked on.
  • The headquarter can easily grasp the situations of subsidiaries.

Some advantages and disadvantages of the centralized way are as follows.


  • Tasks can be done efficiently owing to batch processing.
  • Progress management is easy.
  • Documentation with the consistent format can be done.
  • Immediate responses to problems are possible.


  • Because the executers of business and creators of documents are different, there could be deviation from the actual situations, which would later require a lot of corrections.
  • Each department is not aware of internal control.

Distributed Way

The distributed way is effective in the following cases.

  • A company can not afford dedicated manpower for documentation.
  • A company has a lot of subsidiaries.
  • Business is diversified.


  • Documentation can be done faithfully based on actual situations, and thereby major revisions are not required later.
  • Each department can be aware of internal control.


  • Documentation of the consistent format is difficult to achieve.
  • Progress management is difficult.

In addition, hybrid ways are possible, for example a way in which only "business description document" is created at each department and others are created by the project team, or a way in which a project teams are placed for each functional class, and so on.

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