PwC Japanese Affiliate Misuzu to Shut Down Following Securities Company Audit Scandal

Headnote

Audit Developments

Auditor Liability

TOKYO-Misuzu Audit Corporation, a Japanese affiliate of PricewaterhouseCoopers, announced Feb. 20 it would shut down at the end of July for its lax audit of Nikko-Cordial securities Co.'s accounting manipulations.

The shut-down comes less than six months after the former ChuoAoyama PwC was restructured into Misuzu, following its failed audit of leading Japanese cosmetics company, Kanebo Inc., which engaged in accounting fraud. Chuo Aoyama was alleged to have participated in the fraud.

Misuzu Chairman and CEO Hideki Katayama said in a statement Dec. 20 that the accounting company would transfer its certified public accounts and administrative employees to KPMG Azsa & Co., Ernst & Young Shinnihon, and Deloitte Touche Tohmatsu.

Katayama said that the decision to negotiate the...