TOKYO, Jun 09 (Pulse News Wire) – Tokai Rika CO.,LTD. (6995.T) disclosed today that its internal control system related to financial reporting contained significant deficiencies based on the Financial Instruments and Exchange Law Article 24, Item 4, Paragraph 4.
The company identified issues primarily concerning tax effect accounting for multiple retirement benefit programs, leading to inaccuracies in deferred tax asset recoverability assessments. Despite having established procedures and checklists, the documentation lacked detailed steps for scheduling temporary differences and their resolution timelines. As a result, errors occurred during the fiscal year-end closing process. The company acknowledged that these deficiencies could significantly impact financial statements and classified them as material weaknesses requiring disclosure.
Due to the late discovery of these issues within the fiscal year, corrective actions could not be implemented by the end of the fiscal period. To address these shortcomings, TOKAI RIKA plans to revise guidelines and checklists, enhance staff training, and increase consultations with auditors on complex accounting matters. All necessary adjustments stemming from these material weaknesses have been reflected in both the non-consolidated and consolidated financial statements. However, the audit opinion remains unqualified, indicating overall financial statement accuracy despite the reported deficiencies.
🟢 Confidence: High AI-translated content.