Toshiba plans to replace auditor PwC after earnings impasse

Wed Apr 26, 2017 12:49am EDT
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By Taiga Uranaka and Taro Fuse

TOKYO (Reuters) - Toshiba Corp, the troubled Japanese conglomerate, wants to replace auditor PricewaterhouseCoopers Aarata (PwC) to resolve an impasse over full-year earnings and remain listed, two sources briefed on the matter said.

PricewaterhouseCoopers was hired in June last year as part of major changes at Toshiba following a $1.3 billion accounting scandal. Ernst & Young ShinNihon LLC, its auditor at the time, was fined for failing to spot irregularities.

Months later, Toshiba announced a separate $6.3 billion writedown after dramatic cost overruns at its U.S. nuclear business. That has since prompted its Westinghouse nuclear unit to file for bankruptcy, and Toshiba to put its prized memory chip division on the block.

Toshiba and its auditor have been at odds since the surprise writedown and earlier this month the company filed twice-delayed business results without an endorsement from PwC, putting its listing on the Tokyo Stock Exchange in jeopardy.

Toshiba needs shareholder approval to sack its auditor, but Japanese companies are allowed to hire auditors temporarily if the incumbent quits.

The sources, who cannot be named as discussions are not public, said Toshiba was planning to remove PwC but gave no details.

Toshiba spokesman Yukihito Uchida said the company was considering options, but nothing had been decided. A PwC spokeswoman declined to comment.

The Nikkei business daily said Toshiba wanted to hire a second-tier accounting firm, since the other two of the big four, Deloitte Touche Tohmatsu and KPMG Azsa, have potential conflicts of interest given past business deals.   Continued...

FILE PHOTO: The logo of PricewaterhouseCoopers is seen on the local offices building of the company in Luxembourg, April 26, 2016. REUTERS/Vincent Kessler/File Photo