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Accounting Misuse

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Submitted By ikabod
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Background:
Toshiba Corporation is a 140 year old Japanese manufacturing giant. It is a multinational conglomerate corporation headquartered in Tokyo, Japan. Its diversified products and services include information technology and communications equipment and systems, electronic components and materials, power systems, industrial and social infrastructure systems, consumer electronics, household appliances, medical equipment, office equipment, lighting and logistics. It employs around 200,000 worldwide.
The Scandal sequence: * April of 2015, Toshiba announced that it is investigating some accounting irregularities. * July of 2015, Toshiba CEO Hisao * $ 1.2B profit inflation over the course of 7 years (2008 to 2015) was reported * 2 former CEO’s were implicated, Atsutoshi Nishida (2005-2009) and Norio Sasaki (2009-2013) * 8 more directors of the board resign. * September of 2015, Chairman Masashi Muromachi announced a $4.0B projected annual loss. * December of 2015, Muromachi Toshiba's market value down by $8.0B * May of 2016, it was announced that Satoshi Tsunakawa will be the new CEO.
Toshiba current stocks: The drop started when they announced the accounting anomaly.
Impact:
1. Toshiba faced a series of restructuring affecting thousands of employees. 2. Toshiba is selling some of their divisions: * Toshiba sold their home appliance division to China’s Midea. * Toshiba sells their medical equipment division to Canon. 3. The company lost the investor’s trust thus causing the company stocks to continuously decline. 4. Threat of being delisted in the stock market. 5. It also affected the over-all credit rating of the company. 6. Foreign investors are having this vague feeling of uncertainty which could lead to less buying of Japanese stocks. 7. Japan’s reputation is continuously being

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