The case that I reviewed involving the issuance of a modified audit opinion was in relation to Toshiba Corporation's ("Toshiba") FY2016 annual report filing. In this case, the auditor, PricewaterhouseCoopers Arata, issued a qualified opinion, expressing that the financial statements were fairly presented with the exception of a specified matter related to recorded losses. During FY 2016, Westinghouse Electric Company, then a subsidiary of Toshiba, acquired CB&I Stone & Webster, a nuclear construction and integrated services business. In measuring the assets acquired and liabilities assumed for this acquisition, Toshiba recognized some provisional losses of which the company believed were calculated based off all information available at the end of the reporting period. However, PricewaterhouseCoopers, Arata disagreed with the timing of the recognition of such losses, arguing that Toshiba did not utilize the totality of information available to calculate the estimated losses and if they had, they would have found it necessary to record all or a substantial portion of them as current liabilities, not losses.

As a result, PricewaterhouseCoopers, Arata issued a qualified opinion on the audit of Toshiba's financial statements, stating that they were "not in conformity with accounting principle generally accepted in the United States" and thus "had a material impact" on the company's consolidated financial statements (Toshiba, 2017).