The work done by Olympus statutory was accountable for the accounting scandal but they have also discharged two global accounting firms, KPMG and Ernst & Young. Statutory auditors are non-voting members of Japanese boards. Their roles are to be responsible for legal and ethical supervision. They are not connected to the outside accounting firms that inspect/audit companies’ financial statements. In a report, five past and present statutory auditors at Olympus should have gathered evidence to the falsehood and examine closely the top executives’ behaviour. However, the false-accounting scheme had been hidden in a clever manner even for KPMG and E&Y to detect it and Olympus’s accountants managed to escape the blame. The masterminds of the affair were hiding the unlawful acts by smartly manipulating experts’ viewpoint. Olympus had either been set up or Mr Shuichi Takayama, the president, had failed to prevent the accounting problems. This result in the managers covering more than 100 billion Yen worth of investment losses beginning in the 1990s. The scandal has prompted numerous questions about whether the auditors knew what the company was doing and why they had failed to disclose the distortion. KPMG Azsa resigned from Olympus’s accounts in March 2009, even though they disagreed with the way Olympus accounted for the acquisition of Gyrus, medical equipment maker from UK which was acquired in 2008. Olympus paid a very high fee to their financial adviser, about one-third of the $2.2 billion paid for Gyrus, considering that most merger and acquisition advisory fees are about 1% of the acquisition price. The two accounting scandals raise several questions about the effectiveness of reforms which were proposed from 2000 and were supposed to make financial fraud and covering up losses more difficult to carry out. Industry executives were also aghast because the two scandals which involved Japan’s top three accountancy firms and that the KPMG Azsa accountants assigned to Olympus were considered among Japan’s best. This could lead to both KPMG Azsa and Ernst & Young ShinNihon be forced to cease their business operations.