• Register
Return to: Home > News > Assurance and Accounting > EY ShinNihon will audit Toshiba’s corrected accounts… while under investigation

EY ShinNihon will audit Toshiba’s corrected accounts… while under investigation

The Japanese Institute of Certified Public Accountants (JICPA), a self-disciplinary professional body, has launched an investigation into EY ShinNihon's past audits of Toshiba Corp, while the firm will audit the company's corrected accounts.

Toshiba Corp is accused of having overstated its profits by $1.2bn since 2008 according to an investigation by an independent commission. Making it Japan greatest accounting scandal since Olympus in 2011.

The report suggests auditors EY ShinNihon, member firm of EY Global, were given false explanations of the company's position and that it would have been difficult for them to detect the malpractices.

"It is hard to understand the nature of the difficulties that the auditor would have encountered," CFA Institute director of financial reporting policy Matt Waldron wrote in a post on Market Integrity Insights. "Given the sheer size of the misstatement, it begs the question: Why was the auditor blind to the accounting irregularities?"

The independent commission's revelations provoked a mass resignation of Toshiba top management and the Japanese company has published an action plan to correct past accounting irregularities. However, according to Toshiba's action plan, the corrected amounts will be audited by EY ShinNihon.

"The very auditor under whose watch the irregularities occurred," Waldron wrote. "Having another audit firm review the corrections seems a more reasonable strategy given what Ernst & Young ShinNihon missed, for whatever reason, over the span of six years. "

At the time of publication, EY Global and EY ShinNihon were not available for comment.

Top Content

    The UK: uncertain waves rule Britannia

    he UK’s accountancy profession is currently in a period of much uncertainty. The Competition and Markets Authority (CMA) has released its review into the listed audit market which could cause the biggest shake-up the profession has seen in years, the Kingman Review has described the Financial Reporting Council (FRC) as not being fit for purpose and called for it to be replaced. All the while the country remains in a deadlock on Brexit negotiations.

    read more

    Views from the Eurozone

    With Brexit looming, populist governments gaining footholds in a number of countries and movements such as the Yellow Jacket protests in France, 2018 was anything but a quite year for the eurozone. Here leaders report to the IAB on their markets.

    read more

    Eastern promise and how to find it

    With China rising as a global power, Jonathan Minter spoke with ShineWing’s Zhang Ke and Marco Carlei at the World Congress of Accountants 2018 in Sydney, to discuss the cultural challenges that occur when Chinese networks look beyond their border, and the dividends available for those who overcome them.

    read more

    Spain: looking to widen demand

    As Spanish accounting professionals prepare for new audit regulations, the Paul Golden asks what they need to do individually and at firm level to maintain and increase demand for their services.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.