A load of tosh? Toshiba's accounting scandal

Article Review
APRIL 3, 2023

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
SECTION 1.....................................................................................................................................2
SECTION 2:....................................................................................................................................3
SECTION 3.....................................................................................................................................4
SECTION 4.....................................................................................................................................4
SECTION 5.....................................................................................................................................7
REFERENCES................................................................................................................................9
APPENDICES...............................................................................................................................11
TIMELINE OF KEY EVENTS.................................................................................................11
TOSHIBA'S FINANCIAL STATEMENTS BEFORE AND AFTER THE ACCOUNTING
SCANDAL................................................................................................................................12
COMPARISON OF THE STOCK PRICES OF TOSHIBA CORPORATION AND ITS
COMPETITORS........................................................................................................................13

INTRODUCTION
This assignment aims to review and analyze the business case of the Toshiba accounting scandal,
which was widely reported in the media in 2015. The assignment is divided into five sections,
each focusing on a different aspect of the case.
In the first and second sections, we provide background information about Toshiba as a
company, including its history, key business areas, and organizational structure. In the third
section, we summarize the key findings of the Toshiba accounting scandal, including the factors
that contributed to the fraudulent accounting practices and the consequences for the company.
The fourth section of the assignment examines the theoretical frameworks, models, and concepts
that are relevant to the Toshiba case. We discuss how these theories can help us understand the
causes and consequences of the scandal, as well as the implications for corporate governance and
ethics.
In the fifth section, we offer our views and ideas about how Toshiba is or will be performing in
the future, considering the reputational damage caused by the accounting scandal and the
challenges the company faces in its key markets. We also discuss how the company can sustain
its competitive advantage over rivals and overcome any problems it may face in the future.
Finally, in the conclusion, we provide a summary of our main findings and conclusions about the
Toshiba accounting scandal, highlighting the importance of ethical behavior and corporate
governance for long-term business success. Overall, this assignment provides a comprehensive
review and analysis of a significant business case that has important implications for companies
and stakeholders around the world.
SECTION 1
Title: "A load of tosh?" Toshiba's accounting scandal
Author: Theo Leggett
URL: https://www.bbc.com/news/business-33514415

SECTION 2:
Toshiba Corporation is a Japanese multinational conglomerate that specializes in various fields
such as electronics, energy, and infrastructure. The company was founded in 1939 and has since
become one of Japan's leading manufacturers of electronic products, including laptops,
televisions, and home appliances. Toshiba also provides services related to power generation and
distribution, nuclear energy, and smart community solutions (BBC News, 2015).
In 2015, Toshiba was embroiled in a major accounting scandal that shook the company's
reputation and raised serious concerns about the Japanese corporate governance system. The
scandal centered around the overstatement of profits in its nuclear energy and semiconductor
businesses, which amounted to a total of $1.2 billion. The company's management had been
systematically inflating profits over a period of several years, hiding losses and manipulating
accounting data to meet ambitious financial target (Arora, 2017).
The scandal came to light when a whistleblower within Toshiba reported the irregularities to the
company's audit committee. This triggered an investigation, which revealed that the company
had been engaging in fraudulent accounting practices for over a decade. As a result, the
company's top executives were forced to resign, including the CEO, Hisao Tanaka, who took
responsibility for the scandal (BBC News, 2015).
The fallout from the scandal was severe, as Toshiba faced lawsuits, regulatory fines, and a loss
of investor confidence. The company's reputation was severely tarnished, and it struggled to
recover from the scandal. The incident also highlighted the systemic issues in Japan's corporate
governance system, which had long been criticized for lacking transparency and accountability
(Chugh, 2017).
In response to the scandal, Toshiba implemented a number of reforms aimed at improving
corporate governance and restoring investor confidence. These included the appointment of new
independent directors, the strengthening of internal controls and risk management, and the
establishment of a whistle-blower hotline (Conyon & He, 2017). However, the incident remains
a cautionary tale for companies around the world, illustrating the importance of ethical business
practices and the need for effective corporate governance mechanisms to prevent fraud and
misconduct (Fujimura, 2017).