Search Results for: olympus

Investigators for Olympus aren’t pointing fingers at KPMG and E&Y

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An investigative panel set up by Olympus released a report saying the external auditors couldn’t have found the fraud. 

The panel also blamed five internal auditors for helping with the cover up.  Olympus has sued the five.

An Internet search today indicates there are 270 articles discussing this. Here are a few you can browse:

One panel of investigators appointed by Olympus pointed fingers at the external auditors. I discussed this report in my guest post at re: The Auditors.

In contrast, this new panel isn’t pointing fingers at the external auditors.  They are blaming the internal auditors for the costs incurred to investigate the cover up.

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Olympus update – lawsuit against former chairman & former CEO gives up trying to get his job back

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Olympus has sued its former chairman and two other individuals. According to the Wall Street Journal article, Olympus Sues Former Chairman (all articles behind a pay wall), when the company made announcement, they didn’t give details of the suit or even say exactly how people are being sued.

Most interesting tidbit in the article is the lawsuit was based upon an independent report from three lawyers regarding the role of the board in the scandal. That report will be released on January 10, according to the article.

Hint that there’s major, useful news on the horizon:

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My guest post at re:The Auditors on accounting for the Olympus fraud

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Francine McKenna asked me to combine my short comments on the Olympus fraud into a guest post on her blog.

I’m quite happy to announce my revised, expanded, and edited discussion is available. You can read the full thing at How Do You Hide A Multibillion Dollar Loss? Accounting For The Olympus Fraud

Many thanks to Francine for the wonderful opportunity to speak to a big audience.

Olympus releases restated earnings- an auditor’s observation

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Olympus had a hard deadline of Wednesday to file its second quarter earnings report or face automatic delisting from the stock exchange.  It met the deadline.

Along with the quarterly report, Olympus announced restated financial statements for the last five years.

Here are a few tidbits from today’s news reports of interest to us auditors.

Size of the fraud hasn’t change – currently at $1.58B.

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Summary of Olympus financial fraud – part 2a

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Article in the Wall Street Journal on 12-7-11 gives more background on the methodology of the Olympus fraud:  Panel Calls Olympus ‘Rotten’ at Core. (article behind paywall)

I made a few updates on my part 2 post. Have a few more comments in this post – things that are interesting to me.

Hiding losses was legal and normal

Apparently, moving underwater investments off the books was so common in Japan that it had a nickname, tobashi.  …

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Summary of Olympus financial fraud – part 2

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Previous post described the investigative report of the Olympus financial fraud.

Now a discussion of the debits and credits. Final post will discuss the underlying causes identify by the investigative committee and some of their recommendations.

Update 2 – When accounting rules changed in 2000, the report says Olympus management decided to move the investments off the books instead of taking the write down. Thus phase 1 was launched.

How do you hide a $1.7B loss?

This is what I was most curious about and what prompted me to read the report.

Here is a one paragraph summary from the report: …

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Summary of Olympus financial fraud – based on independent report – part 1

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The investigative report on the Olympus fraud has been released. The fact pattern, causes, and recommendations are scathing.

This and my followup post are a thumbnail description.  These are the result of just an hour or two of research.  If you wish to expand the summary, point out errors, or clarify, feel free to do so.  My guess is that readers of this blog won’t want as many details as I am providing, but do want to know more than just what shows up in the general news reports.

You can see one news article here: Olympus faces Tokyo delisting after management hid $1.7 billion of losses.

The Wall Street Journal has a good report, but it is behind a pay wall. WSJ also has a copy of the report, but I caution you on getting their copy.  I was able to access the report once, but when I went back to it, accessing the report crashed my computer. Twice.

Update: Olympus has made the report available here.

The report’s conclusion compares management to a cancer:

Olympus had originally been a sound company, with diligent employees and high technical strength. Not all part (sic) of the company was involved in this misconduct. Olympus should remove its malignant tumor and literally renew itself. (Page 30)

What is the amount of the fraud and time frame?

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Fog around structure of Olympus fraud starting to lift

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I’m slightly curious how Olympus hid losses of one or two billion $US, but not curious enough to do my own research.  Also curious how three different Big 4 firms missed it.

Thus I will rely on other bloggers, such as Tracy Coenen’s post, Financial Statement Fraud: Olympus Makes It Look Easy, at her blog, the Fraud Files.

One of the several components they used to make losses go away is paying a lot of money to buy companies that have no history, earnings, or assets: …

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Time to start paying attention to the Olympus accounting fiasco

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Yeah, Olympus.  The people who made that cool camera you’ve been using.

Here’s the story in one sentence: It looks like Olympus has been materially cooking the books since the late 1990s.

In one paragraph:

The maker of cameras and medical-imaging equipment said Tuesday that it used four acquisitions in 2008 to “clear up” paper losses on investments dating to the 1990s. Asahi and KPMG AZSA signed off on Olympus’s statements for those years. There’s no indication that the accounting firm signed statements that it knew were misleading or incorrect.

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Followup on Toshiba accounting scandal – “Record” fine as cost of doing business

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Cleaning up the numbers. Image courtesy of DollarPhotoClub.com
Cleaning up the numbers. Image courtesy of DollarPhotoClub.com

A couple of articles have caught my eye on Toshiba’s book-cooking fiasco.

Tiny lawsuit to recover damages

11/10 – Wall Street Journal – Toshiba Shares Fall After Loss, Lawsuits – Toshiba has sued three former presidents and two current executives. Goal is to recover ¥300M ($2.4M).

Claimed amount of the accounting fraud is still ¥155B ($1.26B) after tax. Previously mentioned the estimate in September was about $1.87B pretax and $1.29B after tax. Looks like the estimated of amount of book-cooking is holding firm.

Just as a completely wild guess, I’ll guess the $2.4M would not even cover the legal fees already incurred by Toshiba to deal with the mess created by the named executives.

“Record level” fine as a cost of doing business

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Time to start paying attention to the Toshiba accounting scandal

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Picture courtesy of DollarPhotoClub.com
Picture courtesy of DollarPhotoClub.com

Yeah, yeah, I’m late to the party.  Since this has been in the news for a few months, I am a bit tardy talking about the issue. On the other hand, yet another round of billion-dollar book-cooking in Japan doesn’t have a lot of impact on accounting firms that only work in the US.

So what’s going on?

Apparently Toshiba has around a dozen different schemes to inflate profits. Make that two dozen. Make that two dozen and counting. Amounts involved are reported to be half a billion dollars, one billion, or three billion. Take your pick.

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Commerzbank joins the billion-dollar-fine club

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The newest member of the elite club of banks that write billion dollar checks to settle up with the regulators is Commerzbank AG, the second largest bank in Germany.

After reading several reports on the billion and a half settlement, it seems to me that their corporate culture, at the core personality level, is to be not overly concerned about complying with US law.

The two primary issues are aiding and abetting the billion-dollar Olympus fraud and processing a quarter billion dollars of wire transfers for Iranian and Syrian customers banned from the US banking system.

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“The dozy watchdogs” – Deep discussion in The Economist on the state of audit profession

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Gotta’ love the drawing of a seated Doberman with a wondering look on his face as he stares at a trail of muddy feline paw prints. Staring around helpless are three other dogs. The befuddled watchdog has a tag labeled “PwC” in case you hadn’t yet caught the point.

The previous drawing was of an overfed cat in a three-piece suit helping himself to a bag of cash from a safe as four dogs snoozed in front of the safe. Said dogs have a tag identifying each as a member of the Big 4.

If you are an auditor, you really should get a fresh cup of coffee and check out The Economist’s discussion of The dozy watchdogs. Will let you see what non-accountants think of the profession (not too much) and the job the big firms are doing (not so great).

Yeah, there is a problem

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