Panel Exonerates E&Y from Olympus Accounting Fraud

Michelle Remo, “Big 4″ observer
December 28, 2011 /

Olympus auditors Ernst & Young Japan has been cleared in the latest report of the panel investigating the accounting fraud at the Japanese camera-maker.

Olympus recently admitted the $1.7 billion (£1bn) accounting scandal that built up from the alleged decades-long orchestration of some company executives.

The accounting scandal invited criticisms against Ernst & Young ShinNihon, which signed off Olympus’s 2010 results and found nothing wrong with the figures.

News agency Bloomberg reported that Olympus “restated more than five years of past earnings on Dec. 14, wiping out 70 percent of its net assets.”

The panel, which was set up by Ernst & Young ShinNihon early December, admitted that it had limitations during the course of the probe, including the reluctance of the company’s previous auditor, KPMG AZSA, which signed off on Olympus’s 2009 results, to participate in the probe.

Meanwhile, Ernst & Young is currently investigating Olympus’s purchase of Gyrus Group Plc, which, it said, has complicated links to the company’s overall cover-up.

A total of 70 executives are facing inquiries over the losses and transactions for acquisitions, which include $687 million in payments to advisers in the purchase of Gyrus in 2008 and stake writedowns in three other acquisitions.

Documents show that in March 2010, $620 million was paid to buy back Gyrus preferred shares given to its advisers as part of fees.

 

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