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Running head: TOSHIBA ACCOUNTING SCANDAL 1Toshiba Accounting ScandalStudent's Name:Institutional Affiliation:
TOSHIBA ACCOUNTING SCANDAL 2Toshiba Accounting ScandalMany companies are faced with financial and accounting scandals, in 2015, Toshiba, abusiness that operated in the worldwide scale on a variety of its products including thesemiconductors, personal electronic gadgets, home appliances, and medical equipment was facedwith a serious scandal. It reported a net sale of more than $ 63 billion for the fiscal year thatended March 31, 2015. The auditor found direct evidence of the misappropriated accountingpractices and the overrated profits that were put in multiple Toshiba business units, whichincluded the visual product units, the PC units and the semiconductor units (JOHNSON, &WILEY2019, 29).In 2015, there are major irregularities emerged in the accounts of the Japaneseconglomerate, which manufactured everything from consumer electronics to nuclear energytechnology. This scandal first emerged when Toshiba itself investigated the accounting practicesof the group’s energy division in April 2015. Toshiba had overstated profit by 151.8 billion yen(US$1.2 billion) over seven years. This lead to the firm suffered a cumulative net loss of morethan 255.5 billion yen (US$2.14 billion) over the previous seven years. All the dividendpayments were right away suspended so do the shareholders. The brand reputation is significantdamage and further leads to sales losses.Toshiba Corporation has inappropriate accounting practices where it has significantirregularities and the profits have significantly inflated. It was first discovered in April 2015 ofthe group’s energy division. After an external committee conducted a detailed audit on thegroup’s accounting practices, it was found that Toshiba had overstated profits by 151.8 billionyen (US$ 1.2 billion) over seven years (SIMON, & STANLEY 2018, 139).Later, when the full,
TOSHIBA ACCOUNTING SCANDAL 3accurate financial result was released, it was discovered that Toshiba had suffered a cumulativenet loss of more than 255.5 billion yen (US$ 2.14 billion) over the previous seven years. Table 1.1 Sales and Net Income for Toshiba for Seven YearsYearNet Sale (Original)Net Sales (Restated)Net Income(Original)Net IncomeRestated200771166682137.4137.4200874047209127.4127.4200965136373(343.6)(398.9)201062916138(19.7)(53.9)201163996264137.8158.320126100599573.73.220136503572250.813.4The corporate governance is mainly important when it comes to deal with operational andmechanism. Corporate governance can be assessed effective if it can tackle major issues withinthe company. When the fraudulent activity in Toshiba exists, it shows how weak the corporategovernance that have been applied for long time period to tackle issues. With the fact supportthat two of the four external members do not have a background of accounting and law. Theappointment of these two just two reach the target that law required to do so. These are the factsthat show corporate governance is merely a framework, not to be the benchmark or principle thatguide Toshiba to achieve their whole objective in ethically (

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