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November 24, 2011

KPMG chairman Andrew breaks silence over Olympus

KPMG chairman Michael Andrew said the Olympus scandal reveals evidence of a “significant fraud” and has called for co-ordinated regulatory oversight and a global set of standards for the auditing industry, according to Reuters.

Speaking at the Foreign Correspondents Club in Hong Kong, Andrew said KPMG ASZA had done the right thing in the actions it took pertaining to the Japanese company. KPMG ASZA was Olympus’s auditor until March 2009 when Ernst & Young ShinNihon (E&Y), the company’s current auditor, took over.

Reuters claims KPMG was replaced by the camera maker because KPMG disagreed with the way certain acquisitions were being accounted for.

“What is pretty evident to me is that it is a very, very significant fraud,” he said. “We should wait for the Japanese authorities to disclose that.

“I think it is very hard to jump to the conclusion that it’s a corporate governance failure. Regulation will never prevent corporate scandals.”

KPMG and E&Y are being investigated by the Japanese Institute of Certified Public Accountants and Japan’s Financial Services Agency following the revelation of the scandal earlier this month.

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