Toshiba Accounting Fraud Scandal 2Toshiba Accounting Fraud ScandalToshiba has been in business for the last century and its profile around the world is highlyadored. Small scale businesses are trying to imitate Toshiba’s culture so they can get a corporate business share. These small businesses get motivations from the success of Toshiba, hence it has become a role model for many such firms around the globe (Kerr & Twal, 2016). Toshiba, a 140-year-old electronic business dealing with power lines installation, and an Apple supplier of iPhone parts found itself facing accounting fraud (Addady, 2015).Accounting fraud scandals have been rampant among businesses in the world. It was on21st July 2015 when Hisao Tanaka who is the CEO of Toshiba, announced his resignation from the company. The resignation came as a result of the $1.2 million accounting fraud caused by inflated operating profits. The report detailing the accounting misappropriations by Toshiba had surfaced a day before and it was provided by a panel of independent investigators. The accounting fraud was detailed to have happened over seven years, during the terms of the two former CEO and Tanaka. The report about the investigation showed that the Chief Executive Officers did not demand the books be cooked directly, they, however, subjected their subordinates with immense pressure and expected the corporate culture to produce their desired results (Carpenter, 2015). Facts About ToshibaToshiba Corporation's history is traced to 1875 in Japan. The corporation guided post-warJapan to high growth in expanding salient and innovative products in the late 1950s boom. During this period, Toshiba started selling its products in the external markets and relentlessly expanded its businesses globally during the decades that followed.
Toshiba Accounting Fraud Scandal 3By 2015, the multinational Toshiba operated business entities on a global scale dealing with a variety of industries, which included medical apparatus, semiconductors, electronics, home machines, and infrastructure. In the fiscal year ending March 2015, the company announced net global sales of more $63 billion. Toshiba Corporations has more than 200,000 employees globally (Carpenter, 2015). Investigation FindingsThe investigation report found relating evidence of incorrect accounting malpractices andinflated turnover in diverse Company’s business units, such as PC, semiconductor and Visual product units. This accounting misappropriation started in 2008 at a time of worldwide financial crisis which affected Toshiba’s profitability deeply when Atsutoshi Nishida was the CEO. These malpractices continued undetected under the incoming CEO, Norio Sasaki. The scandal,