Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Excerpt)

(Friday, July 24, 2015, 10:04 am to 10:24 am)

[Questions and answers]

Q.

I have a question about the problem of inappropriate accounting at Toshiba. On July 21st, Mr. Makoto Kubo, the previous chairman of Toshiba’s audit committee, asked to step down from his post as a temporary member of the accounting working group of the Financial Services Agency (FSA)’s Business Accounting Council. The report from the third-party committee suggested that Mr. Kubo had not done his job properly as the chairman of the audit committee, or at least that the committee hadn’t been functioning properly, and on July 21st he resigned as a Toshiba director and as chairman of the audit committee. I suppose he will also quit the accounting working group, but the FSA launched the accounting working group for the purposes of expanding the voluntary adoption of international accounting standards and articulating Japan’s vision for international accounting standards, and Mr. Kubo also took part in that debate, so if he steps down under these circumstances, what do you think will be the impact on the accounting working group’s persuasiveness and on the debate going forward?

A.

To begin with, regarding things like the responsibility of individual management teams, that is something for individual companies to make judgements about, so we will not be making one comment after another about a specific company. And this isn’t a case of embezzlement. It’s different from that. The overall problem is that the management of a large company, Toshiba, an internationally-known, large company, is now seen as untrustworthy. People might think that if one company was doing inappropriate accounting others might be doing similar things. This causes problems for every other company, for companies that take their accounting seriously. So in that sense, we think that the impact has been large. And on July 21st he informed us that he wished to resign, and we intend to respond appropriately based on his wishes.

Q.

What about the impact on things like the future debate in the accounting working group, on Japan’s persuasiveness regarding accounting standards? Will there be such an impact?

A.

It’s probably more important be trusted than to be persuasive.