Olympus accounting scandal: lessons learnt and questions raised

Author: | Published: 25 Nov 2011

The accounting scandal engulfing Japanese camera and medical equipment maker, Olympus, has thrown into question the country’s readiness for foreign involvement.

But IFLR’s discovery of a 20-year old call to action on the same compliance issues, as raised by this scandal, rubbishes the notion it will prompt any significant regulatory reform.

Japanese officials are investigating an apparent $4.9 billion hole in Olympus’ accounts as well as possible involvement of organised crime in an accounting scandal which came to light following the sacking of its former chairman, Michael Woodford, last month. It is believed Woodford was ousted from his role after exposing $687 million in unaccounted for legal fees to obscure Cayman Island firms.

On November 8, Olympus admitted inflated advisory fees paid in the $2.1 billion acquisition of Gyrus were used to conceal soured investments dating back decades. In a practice known as tobashi,...