* PwC did not approve Toshiba's April-Dec financial statements
* Management said difference with PwC on validity of past reports (Recasts with source confirmation)
By Taiga Uranaka and Taro Fuse
TOKYO, April 26 Toshiba Corp, the troubled Japanese conglomerate, wants to replace auditor PricewaterhouseCoopers Aarata (PwC) to resolve an impasse over full-year earnings and remain listed, two sources briefed on the matter said.
PricewaterhouseCoopers was hired in June last year as part of major changes at Toshiba following a $1.3 billion accounting scandal. Ernst & Young ShinNihon LLC, its auditor at the time, was fined for failing to spot irregularities.
Months later, Toshiba announced a separate $6.3 billion writedown after dramatic cost overruns at its U.S. nuclear business. That has since prompted its Westinghouse nuclear unit to file for bankruptcy, and Toshiba to put its prized memory chip division on the block.
Toshiba and its auditor have been at odds since the surprise writedown and earlier this month the company filed twice-delayed business results without an endorsement from PwC, putting its listing on the Tokyo Stock Exchange in jeopardy.
Toshiba needs shareholder approval to sack its auditor, but Japanese companies are allowed to hire auditors temporarily if the incumbent quits.
The sources, who cannot be named as discussions are not public, said Toshiba was planning to remove PwC but gave no details.
Toshiba spokesman Yukihito Uchida said the company was considering options, but nothing had been decided. A PwC spokeswoman declined to comment.
The Nikkei business daily said Toshiba wanted to hire a second-tier accounting firm, since the other two of the big four, Deloitte Touche Tohmatsu and KPMG Azsa, have potential conflicts of interest given past business deals.
At a news conference earlier this month, Chief Executive Satoshi Tsunakawa had said there were irreconcilable differences with the auditor over the validity of past reports.
The head of the audit committee, Ryoji Sato, had stopped short, however, of announcing a change of auditor. There were, he said, "various options".
Toshiba's auditors have questioned practices at Westinghouse, where massive cost overruns at four nuclear reactors under construction forced its Japanese parent to estimate a $9 billion annual net loss. They continue to probe.
"Our investigation, which includes checking 600,000 e-mail messages, did not find anything that would impact our accounting reports. Even if we continue the investigation, the situation won't change," CEO Tsunakawa said earlier this month, about the decision to report without the auditor's approval.
Toshiba is currently working on a financial statement for the year ended in March. The TSE's filing deadline is May 15 - if Toshiba misses that, it could be delisted. (Reporting by Taiga Uranaka in TOKYO Laharee Chatterjee in BENGALURU; Editing by Stephen Coates and Clara Ferreira Marques)
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