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Business

Toshiba's accounting firm to investigate itself

TOKYO -- The auditor that signed off on Toshiba's padded earnings has set up an in-house team to find out why.

     Ernst & Young ShinNihon will check to see what it may have done wrong, aiming to prevent a recurrence, at a time when the Financial Services Agency and the Japanese Institute of Certified Public Accountants are also moving to investigate the auditing company.

     The new team, separate from the group that audits Toshiba, answers directly to E&Y ShinNihon Chairman and CEO Koichi Hanabusa. In their day jobs, its roughly 20 members check auditing processes.

     A Toshiba-appointed independent investigative committee has found that the company kept some things from auditors and fed them information not reflective of reality. The E&Y ShinNihon team will dig deeply, interviewing accountants involved in the audits and scrutinizing records.

     Separately, E&Y ShinNihon will set up an advisory committee of three or four outside experts as early as September.

     E&Y ShinNihon was also the auditing firm for Olympus, which came under fire in 2011 for embellishing its earnings. Similar probes were carried out back then by outside investigators.

(Nikkei)

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