Toshiba Financial Fraud-Impacts of the fraud.docx - Impacts...

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Impacts of the fraud Toshiba company is a multinational corporation with its headquarters located in Tokyo, Japan. The company is a technology company that manufactures various products, and it has several business entities all operating in different industries under one company. As of 2019, the corporation had over 100 000 employees worldwide. Since its operations commenced, the company has formed joint ventures with a company like United Technologies to expand its operations in regions other than Japan. In May 2015, there was a significant accounting fraud that affected the operations of the company. The essays describe the impacts of the accounting fraud on Toshiba company, the brand, the industry, and Japan. Impact of the fraud to Toshiba Company The accounting fraud of the company was one of the biggest scandals in Japan. Before the year 2009, the company was operating in large profit margins and recorded a significant increase in its revenue. A team of investigators investigated the company's books from the 2009 financial year to 2014 ( Mehta, Anupam, and Bhavani, 698). The investigation findings showed the company had overstated its sales and gross profits for all its projects from 2009 to 2014. The company overstated its earnings for the financial period showing a 1.2 billion dollar false net profit ( Caplan, Saurav, and Marcinko 44). The aftermath of the scandal led to job cuts and job division in the corporate. All the board directors and the company's then-chief executive officer, Hisao Tanaka, were forced to resign after the scandal was made public. The company also had to cut about 10 000 jobs as a part of the restructuring, leading to the majority of the company employees being jobless, especially those in the company's consumer electric division. After the scandal, the company also offloaded its health care division in all its companies around the continent. The company had to sell its health care and medical division to canon company and most of its applications to Media group of China
as part of its restructuring. Toshiba company also had to liquidate its British nuclear power unit and sell its Unites States liquefied natural gas to the China group. The accounting fraud's significant impact was it had to incur an operating loss of about 740 million dollars after the first six months of its operation after the scandal. The company also recorded an asset devaluation loss of about 386 million dollars during the next financial year after the scandal. The company's market share for the 2015 financial year also declined by around 6 percent. At the end of the 2015 financial year, Toshiba company recorded a loss of 4.6 million dollars. The company also lost its market value; the losses were also from its home appliances unit.

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