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Toshiba Accounting Scandal Gets Worse

Toshiba is having a tough bout. Last month, news that the Japanese technology company had suffered from a longstanding accounting scandal made its way west, and several executives — including its chief executive — stepped down.

This week, it turns out that Toshiba’s troubles are far from over. Reports revealed Monday (Aug. 31) that the corporation has once again pushed back publishing its annual financial report because it has discovered even more accounting errors amid an internal investigation.

“We deeply apologize for the situation we are in yet again,” the company’s new Chief Executive Masashi Muromachi said at a news conference, according to Reuters, “and for the inconvenience and concern we have caused our stakeholders, including shareholders and investors.”

The company was slated to release its already delayed earnings report Monday for the financial year ended in March. Toshiba said it has once again delayed the release of those figures after discovering irregularities in its fixed assets charges at multiple subsidiaries, according to reports, as well as an “improperly timed booking of loss provisions” at one of its U.S.-based subsidiaries.

The revelations emerged from an internal investigation that coincides with an independent probe of Toshiba’s books. Authorities found the company had overstated financial results by about $1.2 billion over the last few years. Analysts are calling it the worst corporate scandal in Japan in the last four years.

According to Toshiba, authorities have granted permission for the corporation to delay the release of its earnings report until Sept. 7. And while financial details of the new reporting irregularities were not revealed, the company described the errors as “not huge.” In all, about 10 new accounting errors since 2010 were found, reports said.

For some analysts, the scandal ignites a larger debate about corporate culture in Japan, which, according to some critics, enforces accounting rule-bending and breaking to appease corporate executives.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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