Auditor to review all clients' books following penalty




The auditing firm penalized for overlooking electronics maker Toshiba's years of fraud will re-check data from its roughly 4,000 clients by the end of March in a bid to recover customers' trust.

Ernst & Young ShinNihon will review submitted documents for any deficiencies or red flags. The firm looks to ensure that there are no problems with its own procedures before work heats up on full-year earnings for companies closing their books in March. Any issues that come to light will be rectified immediately, and the fixes applied in coming audits.

EY ShinNihon audits books at 968 listed Japanese companies -- nearly one-third of the country's total -- including Hitachi, Nissan Motor and Toray Industries. It will concentrate its review efforts on listed corporations during February. Books will get a look both from accountants assigned to each company and from a second EY ShinNihon team to ensure objectivity. The firm will have accountants at international partner Ernst & Young visit Japan to audit some large enterprises with extensive overseas operations. Reviews of the firm's roughly 3,000 unlisted clients are to wrap up by the end of March.

Japan's Financial Services Agency slapped the firm with a three-month freeze on new business and other penalties in connection with its failure to detect faulty accounting by Toshiba, which inflated profit by 224.8 billion yen ($1.96 billion) over about seven years. EY ShinNihon Chairman Koichi Tsuji, who took office on Feb. 1, has hatched a number of business improvement measures, including a system by which outside experts will confirm the quality of audits.

Popular posts from this blog

The non Americans' guide to US elections

Bermuda Triangle mystery solved?

Malaysia Budget 2017 live updates