Komori
Earnings8798Advance Create Co.,Ltd.Financials (excluding banks)

Notice Regarding the Formulation of the Outline of Measures to Prevent Recurrence

In response to the inappropriate accounting practices and governance issues identified by the third-party committee, the Company formulated an outline of measures to prevent recurrence and adopted it by resolution of the Board of Directors. The Company will restrict the authority of the Representative Director and President, strengthen oversight by outside officers, the accounting department and internal audit, and enhance the review of high-risk transactions.

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Fiscal Period ClassificationAccounting standardsConsolidated / non-consolidatedPeriod CoveredNet SalesOperating profitOrdinary incomeProfit attributable to owners of the parentNet income per shareOperating MarginEquity ratioTotal assetsNet assetsCash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesCash and cash equivalents at end of periodFull-year earnings forecastRevision to Earnings ForecastAnnual Dividend ForecastPayout ratioShareholder Return PolicySegment revenueSegment profitRegional salesOrders received and order backlogDepreciation and amortizationImpairment lossBreakdown of extraordinary income (loss)Disclosure regarding the going concern assumptionChange in accounting policyChanges in the scope of consolidationMaterial subsequent eventsAvailability of Supplementary Financial Results MaterialsAvailability of Financial Results BriefingIssued Shares at Period-EndTreasury Shares at Period-EndFactors Behind Changes in Business Performance

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The reasons the company gives

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The third-party committee’s investigation found that revenue from advertising transactions had been recognized prematurely, revenue from advertising-space sales transactions had been overstated, expenditures without asset value had been recorded as software, and the recognition of outsourcing expenses had been deferred, with some members of management involved in these practices. The Company identified excessive pressure to achieve performance targets, its corporate culture, deficiencies in the processes for verifying supporting documentation and in the checks and balances provided by the accounting and internal audit functions, and insufficient sharing and escalation of risk information as contributing factors.

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Notice Regarding the Formulation of the Outline of Measures to Prevent Recurrence | Advance Create Co.,Ltd. (8798) timely disclosure | Komori