A panel appointed by the board of scandal-hit Olympus has said the "core part of management was rotten", but has found no link to organised crime.The independent investigation found the camera-maker had concealed business and investment losses that ultimately rose to 132.22bn yen ($1.7bn; £1.09bn).
The panel is urging legal action against those who were involved in the cover-up.
It has also said that those who knew about the situation should be replaced.
Losses 'hidden' The 178-page report was commissioned by the Olympus board and undertaken by an independent panel.
It was headed by a former Supreme Court judge, Tatsuo Kainaka, and its findings are based on voluntary hearings and company computer analysis.
The panel recommended significant changes to the board and listed 10 reasons why the scandal took place at the 92-year-old company.
They ranged from poor quality personnel management to incompetent external auditing.
The panel laid the blame for cooking the books over 13 years mostly on two executives, former executive vice-president Hisashi Mori and ex-internal auditor Hideo Yamada.
The panel found no evidence that either executive had gained personally and both have resigned since the scandal came to light.
According to the report, the aim of the two men was to hide losses made from bad investments during the 1990s as the Japanese stock market crashed.
They pointed to the involvement of "external players" that allowed the fraud to persist. "[They] assisted in the concealment while knowing full well that such accounting practices were illegal," the report said.
The independent committee was also critical of Olympus' auditors during the years under investigation, KPMG AZSA and Ernst & Young ShinNihon.
However, in the final analysis, the panel blamed bad corporate governance by the executive management team. "Past [Olympus] presidents had low esteem for transparency and governance," said the report.
'Yes men' Olympus shares have plunged since its sacked chief executive, Michael Woodford, blew the whistle over his concerns about dubious accounting practices at the firm.
The controversy surrounds the payments made by Olympus to financial advisers as part of its acquisition of companies including British firm Gyrus.
The payments came to light when Mr Woodford claimed that he had been forced out of the company for raising questions about these and other accounting practices in October 2011.
Olympus originally denied any malpractice, but eventually acknowledged that it had used acquisitions, including that of Gyrus, to hide investment losses.
Mr Woodford told the BBC that the report showed "the existing directors are 'yes men' who did not react... and have passed their sell-by date".
Mr Woodford resigned from the board last week to concentrate on a campaign to oust the other board members of Olympus. He told the BBC, "They [the Olympus board] should not choose the next management team."
Mr Woodford also said he was in talks with several of Olympus' shareholders. He has said he would be prepared to return to the chief executive position.
He added that there needed to be a change in the whole of Japanese company culture: "Japan has to change its corporate governance and have powerful non-executives."
Shinsuke Amiya, an MP and member of the Japanese ruling party's panel on corporate governance, said they would use the Olympus report to discuss how to recover market trust. They could make it mandatory to appoint external board members.
Investigation continues Although the report is stronger than expected, it does not contain any real new evidence about what happened at the company.
The independent panel which compiled the report was not authorised to pursue a criminal investigation.
Olympus remains under joint investigation by Japanese police, prosecutors, the markets regulator, UK's Serious Fraud Office and the FBI in the United States.
After the report was released, trading in Olympus shares was halted in Tokyo.
The Tokyo Stock Exchange says it is assessing the report and may consider delisting Olympus.
The exchange has already warned that the company may be delisted if it fails to file its accounts report by 14 December.
Even if Olympus hits the deadline, the Tokyo Stock Exchange can still delist the company if it finds it has mis-stated its accounts or had dealings with organised crime.