More than 70 publicly traded companies have announced plans to stop using ChuoAoyama PricewaterhouseCoopers as their auditors in the wake of a window-dressing scandal at the accounting firm.
Most of the roughly 70 firms, nearly 10 percent of around 800 listed clients, will move to one of three other major auditing firms -- Ernst & Young ShinNihon, Deloitte Touche Tohmatsu and KPMG Azsa & Co.
Among the firms that are defecting are Shiseido Co., Toray Industries Inc., Nippon Yusen K.K. and Fuji Fire & Marine Insurance Co.
Three ChuoAoyama accountants were arrested in September for their involvement in Kanebo Ltd.'s falsification of financial statements. The Financial Services Agency earlier this month ordered ChuoAoyama to suspend some of its auditing operations for two months beginning July 1 for having certified the statements.
There is a danger that more of ChuoAoyama's 2,300 clients with auditing contracts will cancel or refuse to renew them if the firm fails to implement reforms.
Many of the companies that have decided to stop using the auditor said they will take on the same auditors as their parent firms or simply not renew contracts that are about to expire.
In contrast, such major companies as Nippon Telegraph and Telephone Corp., Nippon Steel Corp., Sanyo Electric Co. and Taisho Pharmaceutical Co. said they will renew their contracts with ChuoAoyama on the assumption that the auditing firm will implement internal reforms.