Olympus has until December 14 to fix its financial statements in the wake of a high-profile accounting scandal if the camera maker wants to retain its listing on the Tokyo Stock Exchange.
The Japanese company released a
The problems with the camera and medical equipment manufacturer emerged when it fired chief executive Michael Woodford, who had questioned suspicious transactions on the company’s books after just two weeks on the job. He went public and accused the company of siphoning off more than $1.5 billion through offshore funds to hide non-performing securities that it wanted to keep off its balance sheet (see
Woodford’s whistleblowing led to the departures of the company’s chairman, executive vice president, internal auditor and, most recently, a board member.
Now that the third-party report has been released, Woodford has been vindicated and the company’s new president, Shuichi Takayama, has credited him with stepping forward. Woodford is reportedly seeking to return to the company as chief executive, according to the
The third-party report described how Olympus’s longtime auditors, KPMG Azsa LLC, originally warned the company about questionable transactions involving more than $600 million in takeover advisory fees and payments, but when the company hired an outside expert that approved the expenditures, KPMG signed off on the 2009 audit, according to
The report found fault with both firms, noting, "The auditing firm once did point out that a part of the Transaction was unreasonable, thus the check and balance function could have possibly worked. However, as described below, it carelessly relied on the outside experts' report that did not serve its original function and was not eventually able to make the appropriate suggestion. The process which took place at the time of succeeding the role was insufficient, and we must find that were not able to discharge their responsibility in a sufficient manner,"
