Scandal Summary Of Toshiba

942 Words4 Pages
Nihal Arinik Imamoglu

Toshiba Accounting Scandal

Summary of Toshiba Scandal:

In July 2015, C level executives of Toshiba, a 140-year-old pillar of Japan Inc, quit after investigators

found that the company inflated earnings by at least $1.2 billion during the period 2009-

2014. Investigation report releases that there are accounting improper ties which have taken place for

over 7 years. The report shows that there are variety of inappropriate accounting techniques between

different business units such as booking future profits early, pushing back losses, pushing back charges

and other similar techniques that resulted in overstated profits.

The crisis at Toshiba was sparked by the findings of an independent investigation into the company’s

finances and has been revealed via A whistle-blower in early 2015.

Corporate Governance Issues behind the Scandal:

Toshiba is one of the early adopters of corporate governance reforms initiated in Japan. Although

Toshiba has a good governance structure, it was not enough to prevent corporate governance issues.

Accounting improper ties had been detected in many divisions of company. Although there are some

division specific problems leading such a fraud, still there are several common causes across divisions.

1. Top Management Level Involvement in Improperties in company and Corporate Level

Investigation report delivered after the scandal shows that certain members of top management in
Open Document