Material Deficiencies in Internal Controls Relating to Related-Party Transactions and Inter-Store Profit and Loss Transfers
First written in FY2021-Q2. 1 of 3 entries say "Materialised", first in FY2021-Q2. Latest entry: FY2021.
Hiramatsu moved to the "Worse" side of this theme in 2021, 2 years before the typical company in this theme (2023).
The whole theme swung hardest in 2023: 2 of 9 companies on the "Worse" side.
2 other companies' latest entry also says "Worsened".
- FY2021WorsenedAnnual report
「However, because there was insufficient time before the end of the fiscal year, we were unable to complete the remediation of the material deficiencies requiring disclosure by 31 March 2021.」
The company stated that it was unable to complete the remediation by the end of the fiscal year of material internal control deficiencies relating to related-party transactions, inter-store profit and loss transfers, and the assessment of indicators of impairment of property, plant and equipment. - FY2021-Q3Causes of fraudulent financial reporting and control deficiencies identifiedAnnual report
「Based on the findings of the investigation, we determined that it was inappropriate to account for the transfer in question as a sale. We will recognize the asset as property, plant and equipment on our balance sheet and record an impairment loss as necessary.」
Based on the findings of the external investigation committee, the company recognized that fraudulent financial reporting had occurred in connection with the transfer of stores to an affiliate. It clarified that the sale accounting would be reversed and the assets re-recognized as property, plant and equipment. It was also discovered that impairment losses had been avoided through transfers of personnel expenses between stores. - FY2021-Q2MaterialisedAnnual report
「Based on the foregoing, the company determined that its internal controls had not functioned effectively with respect to related-party transactions involving Hiramatsu Research Institute or the founder, or the processing of profit and loss transfers between stores, resulting in material deficiencies requiring disclosure.」
Based on investigations by the external investigation committee and others, the company stated that internal controls had not functioned effectively with respect to related-party transactions and transfers of personnel expenses between stores, resulting in material deficiencies requiring disclosure in relation to financial reporting.