500.com auditor resigns due to bribery scandal

The company has appointed a new auditor.
The company has appointed a new auditor.

The sports lottery provider has announced the resignation of its auditor due to “disagreement with the management” over financial reporting.

Japan.- Online sports lottery company 500.com has announced the resignation of its auditor, Friedman LLP, as a consequence of the bribery case that has put the firm in the spotlight in Japan.

The company has appointed a new auditor to re-audit accounts from the last three years.

The firm said: “Friedman has elected to resign as the auditors of the company because of the disagreement with the management of the company on the effectiveness of the company’s internal control over financial reporting in light of certain alleged unlawful payments by three former consultants while they were engaged by the company in connection with the potential development of an integrated casino resort project in Japan.”

The statement added: “Friedman determined that the payments may have reflected material weakness in relation to internal controls of the company.

“Friedman further advised us on September 23, 2020, that because some of the payments had occurred in 2017 and 2018, the allegedly unlawful purpose of which was not known to Friedman at the date of the audit reports relating to the company’s consolidated financial statements for the years ended December 31, 2017 and 2018”.

It continued: “The integrated audit reports issued by Friedman on the company’s consolidated financial statements for fiscal years ended December 31, 2017 and 2018 should no longer be relied upon.

“The company’s Audit Committee has discussed the issue with Friedman, and it does not agree with Friedman’s conclusion. The Audit Committee is not aware of any information suggesting that the relevant audit reports are inaccurate or misleading.”

500.com’s board has appointed a new auditor, MaloneBailey LLP, to conduct an audit of the firm’s consolidated financial statements as well as the effectiveness of its internal controls on financial reporting for the fiscal year ended December 31, 2019. The auditor will also be tasked with re-auditing the company for 2017 and 2018.

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