Big Four under Japanese scrutiny

Big Four under Japanese scrutiny

Firms criticized over fraud detection measures

In the week following the suspension of ChuoAoyama, the Japanese affiliate of
PricewaterhouseCoopers, Japan’s accountancy regulator has revealed that the
Japanese arms of Deloitte, Ernst & Young and KPMG have all been under
regulatory inspection since last October.

The Certified Public Accountants and Auditing Oversight Board (CPAAOB)
claimed that none of the Big Four are properly equipped to detect fraud and is
threatening them with punitive action, the FT reported.

Akira Kaneko, chairman of the CPAAOB said: ‘The Big Four companies are not
appropriately equipped in terms of structure and functions to detect wrongdoing.
The inspection report will probably reach the same decision.’

Last week ChuoAoyama was handed down the unprecedented punishment of being
suspended as a statutory auditor, prompting the exodus of big name clients.

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