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Business

Toshiba's accounting firm going under the microscope next

TOKYO -- An accountants' association will soon look into the auditing company that signed off on years of inappropriately calculated earnings at Toshiba.

     The Japanese Institute of Certified Public Accountants will interview accountants at Ernst & Young ShinNihon and check documents for major items they may have overlooked, intentionally or otherwise.

     The JICPA could admonish, suspend or expel accountants, depending on what it finds. In cases of material wrongdoing, the association could ask the Financial Services Agency to impose administrative penalties on accountants or the auditing company.

     The new probe will begin after a third-party investigative committee formed by Toshiba announces its findings next week. That panel has already found that employees gave auditors explanations not reflective of reality, so it does not suspect that auditors are at fault.

     But with the problem drawing wide concern, the association has decided to take action. Toshiba is seen having to downgrade past earnings by 170 billion yen to 200 billion yen ($1.36 billion to $1.6 billion). 

(Nikkei)

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