Japanese regulator warns of ‘destructive’ audit shake-up

Taizo Nishimuro, the president of the Tokyo Stock Exchange (TSE), has
predicted a dramatic revolution of the Japanese audit market in the wake of the
suspension of ChuoAoyama PwC for its audit of cosmetics group Kanebo.

The suspension has caused turmoil in the Tokyo markets, but in an interview
with The Times Nishimuro said the TSE would not step in to calm the
storm caused by the Japanese FSA’s ban of ChuoAoyama.

Nishimuro told The Times that the suspension was a ‘proper judgement
and a great warning sign for the future’. He said the fall out from the ban
signalled a move to fairer and more open markets.

‘I do have a tear to shed for those who are going to be penalised, but for
the sake of the future, for the country, it is a necessary evil,’ he said. ‘I
think that the FSA will become more aggressive, and stronger in dealing with the
accountancy system – as it should be,’ he said.

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