Audit - Fuji considers E&Y for Japanese work

Ernst & Young is being considered for audit work by Japan-based Fuji Bank in an attempt to boost the bank’s credibility with Western investors, writes Ben Griffiths.

The bank said it wanted to use Western accountants, rather than Japanese groups, to audit part of its domestic operations – the first time such a move has taken place. The audit contract is likely to be won by E&Y, according to sources, although the bank has yet to make a final decision.

Fuji’s managing director Osuma Kita revealed the bank’s intention, which has highlighted the in-roads western accountants are set to make into the Japanese financial sector as a result of the economic and financial turmoil in Asia and investor doubts about the quality of Japanese accounts.

Fuji’s European division deputy general manager Nobuo Tanaka this week confirmed the bank was examining the possibility of using western accountants, and had talked to E&Y. Ernst & Young refused to comment.

‘In my opinion it is a very good idea,’ Tanaka said. ‘The reason why Fuji Bank wants to employ non-Japanese accountants is so we can show that the figures we release are accurate and show credibility. Some investors are cynical about Japanese accounts given the current situation.’