JA announces its official had embezzled around JPY94 million
Japanese Agricultural Cooperative ("JA") chief, Akita Furusato Nogyo Kyodo Kumiai, has announced that the company has uncovered the embezzlement of JPY94 million (US$840,000) over the course of 14 years by its full-time auditor. The embezzlement came to light after unusual accounting practices were discovered in August of this year. Following the discovery, the auditor admitted to the embezzlement of the funds but has since committed suicide. JA has announced that it will continue to establish a third party committee and investigations will continue.
Businesses and academics weigh in on FSA discussions on auditor rotation regime
The Financial Services Agency ("FSA") has continued its examination of whether to introduce a rotation regime for auditing firms in response to several high profile accounting scandals that have rocked Japan's business landscape. We have previously reported on the Toshiba Corporation accounting scandal in 2015 which was again referred to in the FSA's first survey report on auditor rotation in July 2017. The inclusion of the scandal in the initial report was a rare instance of public analysis of an individual case. The FSA's report specifically noted the fact that Toshiba had engaged the same auditing company (including its former entity) for nearly 47 years and that it was an illustrative example of why the agency was looking into changing the manner in which companies retain auditors. Industry stakeholders and academics have since voiced their opposition and scepticism as to whether an auditor rotation regime policy can be implemented cost-effectively or whether the auditor rotation regime policy will yield better corporate governance without changing other structural elements of Japanese business.