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Japan FSA to fine Ernst affiliate US$16.5m over Toshiba audit: source

[TOKYO] Japan's financial regulator will fine an Ernst & Young affiliate after the firm's audit of Toshiba Corp failed to spot the nation's worst accounting scandal in four years, a source familiar with the process told Reuters on Tuesday.

The Financial Services Agency (FSA) will fine Ernst & Young ShinNihon LLC 2 billion yen (S$23.2 million) and suspend it form taking on new business contracts for three months, in a decision expected to made on Tuesday, the source said, requesting anonymity due to the sensitivity of the matter.

Toshiba said on Monday it would book a record net loss this year and cut about 5 per cent of its workforce as the sprawling conglomerate, reeling from the US$1.3 billion scandal, focuses on chips and nuclear energy.

REUTERS