I will not take offence at your question, Chris, intended in all innocence I
am sure, but no, I am neither auditor nor accountant. But my work over the
past 25 years has brought me into close contact with the profession on both
sides of the fence.
The qualified audit report was on Gyrus Group, the UK company acquired by
Olympus. The shareholders of Olympus UK are, of course, Olympus Japan - so
the shareholders didn't smell a rat, because they *were* the rat! See my
response to Andrew for some prize quotes.
At the end of last month it was reported here
http://www.amateurphotographer.co.uk/news/Olympus_It_is_not_true_KPMG_withdr
ew_from_Gyrus_update_1pm_news_310153.html that:
"[Olympus] hit back at a report that accountants KPMG cancelled their
auditing contract with Gyrus over the latter's alleged relationship with a
firm in the Cayman Islands. In a statement issued on 24 October Olympus said
it appointed new auditors, Ernst & Young, 'because of expiring contracts'.
The statement added: 'Therefore, it is not true that KPMG withdrew from
auditing Gyrus.
'In addition to this, Olympus Group (including Gyrus) has received an
unqualified opinion on the auditing reports for the consolidated financial
statements for the year ended March 2009, from the previous auditor (KPMG).
All the accounting closing procedures were appropriate.'"
It's very carefully phrased
1 KPMG did not withdraw from the group audit - they were sacked by
Olympus (after a 40 year audit relationship), after starting to ask awkward
questions
2 Olympus Group (including Gyrus) did receive an unqualified
consolidated group audit. It was the standalone audit of Gyrus which was the
problem - and it was from the local UK audit of Gyrus that KPMG withdrew.
This one will indeed run and run!
Piers
-----Original Message-----
From: Chris Barker [mailto:ftog@xxxxxxxxxxxxxx]
Sent: 09 November 2011 12:02
To: Olympus Camera Discussion
Subject: Re: [OM] Olympus' future truly looks bleak after latest
revelations...
Piers
I agree, what more could an auditor do? I had not realised that the
auditors had protested, or that others had qualified an audit.
In which case, should the shareholders not have smelled a rat some time ago?
Is there not supposed to be sanction from the Stock Exchange if something
like that happens? Should a public company be able to continue trading
normally with qualified accounts (like the EU, for instance).
Are you an auditor? I failed most of the CA exams back in 1972, thank
goodness :-)
Chris
On 9 Nov 2011, at 11:37, Piers Hemy wrote:
> That's akin to saying that the (real) police did a pretty crap job in
> not arresting [insert name of heinous criminal] before [insert the
> heinous crime] was committed!
>
>> From the various press and agency reports I have seen in the past
>> day, it is
> clear that the incumbent auditors of Olympus Japan at the time of the
> Gyrus acquisition (KPMG Japan) were unwilling to accept what they were
being told.
> They were duly sacked by Olympus, to be replaced by EY Japan. It is
> also clear that the incumbent auditors of Olympus UK - the subsidiary
> which acquired Gyrus - were equally unhappy, qualified their audit,
> and resigned (KPMG UK).
>
> What more can an auditor do?
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