• Register
Return to: Home > News > Big Four > 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

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    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.