Nidec Auditor Declines to Express an Opinion as Impairment Losses Reach ¥632,221 Million
Key Facts
Nidec filed its annual securities report for the fiscal year ended March 31, 2026, on September 30, including a report from PwC Japan that declined to express an opinion on its consolidated and non-consolidated financial statements, according to company disclosures. The auditor said it had not obtained sufficient and appropriate audit evidence to form an opinion on the consolidated statements, adding: "Accordingly, we do not express an opinion on the consolidated financial statements." This differs from the October 28 deadline cited by the company for submitting confirmation of its internal control system to the Tokyo Stock Exchange; it is not a deadline for obtaining an unqualified audit opinion. The Tokyo Stock Exchange had listed Nidec among companies that received a disclaimer of opinion in their audit reports. This distinction between the report filing date and the controls confirmation deadline puts the regulatory remediation process at the center of the matter.
The auditor’s disclaimer was based on matters it said could require further adjustments to the statements, including governance issues, the amount and period allocation of impairment losses, and disclosures related to comparative information. The report also said some personnel-related corrective actions had not been completed, and that employees and executives who participated in, directed or knew about improper accounting practices remained in positions within the financial reporting process. Investigations covered practices including premature revenue recognition, understated provisions, overstated inventory values and the avoidance of impairment losses on fixed assets. The company said the practices identified by the independent committee had been corrected in the consolidated statements, but the auditor’s report maintained that the sufficiency of evidence was the basis for declining to express an opinion. The investigation findings also included falsification of inspection and testing records and the use of non-compliant materials at multiple production sites.
Nidec recorded impairment losses of ¥632,221 million during the fiscal year ended March 31, 2026, according to its disclosure. The figure is directly related to one of the areas cited in the auditor’s report, which addressed the amount of impairment losses and the period to which they should be charged. The company also disclosed unpaid customs duties related to import transactions of $94.1 million, including interest. These items are part of an annual report the company said it completed filing on September 30, but which carried a disclaimer of opinion on its statements. The facts show the breadth of issues that remained before the audit process, from asset valuations to disclosures and controls over accounting procedures.
On corporate oversight, Nidec said the independent investigation committee submitted its final report on April 17, 2026, and the company then announced a revised improvement plan on April 27 in response to the committee’s recommendations. The Tokyo Stock Exchange placed the company under a "Special Alert" in October 2025 over governance and gave it a year to improve internal controls or face the risk of delisting, according to Reuters. Nidec set late October 2026 as the deadline for submitting confirmation of its internal control system to the exchange, with its plan specifying October 28 as the submission date. In another disclosure, PwC representatives said the auditor would issue the appropriate opinion based on the results of its work and the evidence it gathers. The next development is therefore tied to the internal controls matter, while the fiscal 2026 report has already been issued with the auditor declining to express an opinion.
Nidec shares closed at ¥1,741 on October 27, 2026, compared with a close of ¥1,708 in the previous session, according to EL7 data. The data provided do not include the session high and low, and these figures do not link the share price move to any particular announcement. The close came as the deadline for confirming the internal control system remained on the company’s calendar, following the September filing of its annual report. The auditor had linked its disclaimer to insufficient evidence and matters involving governance, impairment losses and comparative information. Daily closing data alone do not establish that the market moved in response to the deadline news or the audit report.