The report singled out three chief executives-the current holder of the job, Hisao Tanaka, and his two predecessors, Norio Sasaki (2009-13) and Atsutoshi Nishida (2005-09).
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In a statement to investors, Toshiba said its operating profits had been inflated by 151.8bn yen ($1.22bn, £780m).
Toshiba has said it is looking to reduce its stake in the business, though analysts say it could be hard to find a buyer.
At this point, Toshiba reportedly has not made a full calculation of the overstated profits.
The improper accounting included overstatements and booking profits early or pushing back the recording of losses or charges, the report said.
Toshiba’s stock had dropped more than 20 percent since May, when Toshiba warned over the ballooning accounting “irregularities” and yanked its earnings forecast – a 120 billion yen net profit on sales of 6.7 trillion yen – for the past fiscal year.
Toshiba has yet to comment on the news, as the committee isn’t set to release its report until Monday, Reuters said, adding that Toshiba said it would reveal the findings on Tuesday.
Hisao Tanaka’s position was widely seen as being untenable after the report published on Monday concluded senior executives colluded in “institutional” accounting malpractices over seven years.
Tanaka and Sasaki, who is currently vice chairman, will likely step down and more than half of the board will be replaced at a shareholders’ meeting in September, sources said.
The Securities and Exchange Surveillance Commission will consider a recommendation to the Financial Services Agency to impose a fine on Toshiba, while the Tokyo Stock Exchange is expected to designate the company to a special post to alert investors, sources said.
The firm, which makes products from laptops to TVs and power systems, has been unable to close its books for the latest financial year and was forced to cancel its dividend.
Long-established companies such as Toshiba tend to have a highly hierarchical structure, making it difficult for employees to challenge top-down decrees.
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Prime Minister Shinzo Abe is backing the corporate reform campaign, as he cracks down on misbehaving corporations in a bid to attract desperately needed foreign investment. but we are yet to see any ground breaking revelations.
