Toshiba shares fell more than 5% today after reports that the Japanese security watchdog suspects the firm of misreporting profits by 40 billion yen ($339.59m) over three years. 

The revelations add to a series of accounting troubles swirling around Toshiba.

It was downgraded by ratings agencies last week after it admitted it may face a multi-billion dollar writedown over its US nuclear business. 

The Asahi Shimbun newspaper said the Securities and Exchange Surveillance Commission would present allegations of accounting fraud to prosecutors, who had previously declined to investigate due to a lack of evidence. 

The watchdog found that Toshiba had reported profit gains in its computer operations during the 2012-2014 financial years, when the section had not generated any profit, the newspaper reported citing unidentified sources. 

Toshiba's two CEOs and a chairman at the helm of the company during that period were involved in the alleged cheating, it added. 

The investigation could open the way to formal criminal charges against the company and its former executives.

Toshiba shares have tumbled 35% since last week.