Japan regulator seeks punishment of Ernst-affiliate over Toshiba audit
A Japanese regulatory board recommended punishing an Ernst & Young affiliate after its audit of Toshiba Corp failed to spot Japan’s worst accounting scandal in four years.
The Certified Public Accountants and Auditing Oversight Board, a regulatory panel within Japan’s Financial Services Agency (FSA), said it had found Ernst & Young ShinNihon LLC’s auditing “conspicuously inappropriate”, but added that there was no indication that Toshiba had pressured the company.
It was not immediately clear how the auditor would be punished. A person familiar with the matter had told Reuters on Monday about the panel’s recommendation.
Toshiba, whose businesses range from laptops to nuclear power, is undergoing a restructuring after revelations this year that it overstated earnings by $1.3 billion as far back as fiscal 2008.
Ernst & Young ShinNihon deferred comments on the issue, saying said it was preparing a statement.
Toshiba is behind Japan’s biggest accounting scandal since fraud was discovered in 2011 at medical equipment and camera maker Olympus Corp, which was also an ShinNihon client.
Source: REUTERS – Japan regulator seeks punishment of Ernst-affiliate over Toshiba audit
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