updated 04:45 am EST, Sat December 3, 2011
Olympus short on time to account for mismanagement
Japanese camera and endoscope giant Olympus has only two weeks left to report its actual financial results for the past five years, according to Reuters. After being sensationally exposed by the company’s ex-CEO Michael Woodford, who uncovered that the company had been cooking its books, Olympus must meet the deadline or face being automatically deregistered. The accounting malpractice at the company, to cover securities losses, extends back to the 1990s.
Olympus and its auditors are desperately trying to piece together all the information that they can to provide a complete picture of the company’s current financial position. They have only until December 14 to determine what the company’s actual losses were and what it had concealed from its shareholders and the Tokyo exchange.
An extension is unlikely, however, it is possible that if the company cannot meet the deadline regulators may give them some breathing room. Regulators are said to be keen on maintaining the status quo in order to protect small investors from suffering the ill-effects of any delisting from the stock exchange.
Japanese law requires Olympus to restate its earning for the past five years. However, to get an accurate picture, up to 20 years of the company’s statements must be revisited and re-audited. KPMG is under particular pressure as it audited Olympus through to 2009, while Ernst & Young is assisting have taken over the job for the past couple of years.
Although the two auditing companies are fully cooperating with each other, it remains unclear if they will be able to paint a completely accurate picture of the real state of Olympus’s financial position over the past five years, in particular.