Photo/IllutrationSatoshi Tsunakawa, president of Toshiba Corp., at a news conference in Tokyo on Aug. 10 (The Asahi Shimbun)

Embattled electronics and heavy machinery maker Toshiba Corp. finally published its earnings results and financial statements for fiscal 2016, thereby meeting stock market requirements--but well after the initial deadline.

Toshiba’s auditor, PricewaterhouseCoopers Aarata LLC, issued a qualified opinion with the report, citing problems with the company’s book-keeping system.

After its illegal accounting practices came to light in 2015, Toshiba supposedly made a determined effort to improve the way it keeps the books. But it has failed to receive an unqualified endorsement from the auditor.

Anxiety and distrust created by the deep trouble in which Toshiba, a listed company, has fallen could hurt the very credibility of the stock market.

Investors are keeping a critical eye on the company’s crisis. Toshiba, its auditor and the Tokyo Stock Exchange all need to fulfill their responsibilities.

Toshiba should, of course, play the central role in dealing with the situation.

PwC Aarata stopped short of issuing an “adverse opinion,” or refusing to endorse Toshiba’s financial statements, a move that would have led to the firm’s delisting.

But the accounting firm stated that the company’s system to ensure appropriate accounting is flawed.

Toshiba, which replaced top executives in response to the accounting scandal, has countered by claiming there are no longer any defects in its financial statements. Still, the company needs to take the auditor’s opinion seriously and rigorously examine its book-keeping system again.

Another factor that is causing concerns about Toshiba’s future is the manufacturer’s troubled and protracted negotiations to sell its lucrative semiconductor business.

The expected sale of the semiconductor memory unit is the centerpiece of the company’s plan to cover the huge losses caused by its failed nuclear power business in the United States.

But Toshiba’s disagreement with its U.S. partner in the semiconductor business over the sale has escalated into a serious dispute, causing significant delays in the sale. It is now unclear whether a deal can be struck by the end of March next year so that Toshiba can avoid delisting.

In Toshiba’s shareholders meeting in June, some major institutional investors voted against the reappointment of some board members, including President Satoshi Tsunakawa.

Toshiba’s top executives should realize that leading shareholders have little faith in their management capabilities.

There are also questions about the way Toshiba’s books have been audited.

Delays in the audit have been caused by disagreements between Toshiba and PwC Aarata over the question of when the company became aware of the losses from the U.S. nuclear power unit.

This problem is different in nature from the company’s accounting violations for inflating profits that were revealed two years ago. But it still concerns the trustworthiness of the company’s financial statements.

It is not clear which side is right concerning the question. But the Japanese Institute of Certified Public Accountants has started an investigation to determine whether the accounting firm has appropriately audited Toshiba’s financial statements. The institute should clarify the problems behind the delays.

Investors are closely monitoring related developments, focusing their attention on whether Toshiba will remain listed.

In response to revelations of Toshiba’s accounting irregularities, the TSE designated Toshiba as a “security on alert,” a status that requires the company to improve its internal management system.

It has been almost two years since the designation, but the TSE is still screening the company’s corporate governance.

Devoting so much time to deciding whether the company should be delisted could trigger suspicions that the bourse takes a lenient view toward problems at large companies.

In order for a stock market to function properly as part of the country’s basic economic infrastructure, it is vital to ensure that accurate information about listed companies is disclosed quickly while any violations of rules are punished fairly and strictly.

Stock market executives would do well to never forget this.

--The Asahi Shimbun, Aug. 12