The accounting irregularities that engulfed Toshiba Corp. have developed into a major scandal that appears likely to result in the resignation of its president and his predecessor over their responsibility for the padding of the major electronics group's profits to the tune of ¥200 billion over five years to the business year that ended in March 2014. A third-party panel of lawyers tasked to probe the improper accounting will disclose its findings as early as Friday, and Toshiba itself is scheduled to explain the outcome later. The company needs to get to the bottom of the structural problems that allowed accounting irregularities of this magnitude to take place. This, along with clarifying the responsibilities of its top management, will hold the key to its efforts to prevent future problems and regain the public's trust.

The irregularities came to light in February when the Securities and Exchange Surveillance Commission launched its probe in response to a whistle-blower report. Toshiba acknowledged the problem and began its own internal investigation in April. It set up the third-party panel the following month as the scope of the irregularities appeared to be much wider than initially believed. Toshiba was meanwhile forced to postpone the announcement of the financial results for its latest business year.

Toshiba initially said it confirmed that its group operating profit had been overstated by at least ¥54.8 billion over the five years, mainly in its infrastructure business division. However, the third-party probe has reportedly uncovered that the padding of profits will reach up to ¥200 billion, with improper accounting also discovered in the group's other mainstay sectors such as semiconductors, personal computers and televisions. The scope of the problem raises suspicions that the illicit accounting — which is said to have involved understating or deferring the reporting of costs and manipulating profits by failing to properly booking appraisal losses — may have been carried out in an organized manner within the giant group.