Toshiba Accounting Scandal Summery Explained Free Sample

Question: Discuss about theBusiness Foundationfor Toshiba Accounting Scandal. Answer: The Case: The Toshiba Accounting Scandal: The Toshiba Corporation is a Japan based conglomerate Company which has its headquarters at Minato, Tokyo, Japan (Friedman and Gerstein 2016). According to Klinsukhon and Ussahawanitchakit (2016), the services and the products that the Toshiba company deals in include the consumer and professional electronic devices and components, communication equipments, power systems, industrial and social infrastructure systems, information technologies, logistics and others. Figure 1: The Toshiba Corporation (Source: Jennings 2015) The average revenue of the Company, as stated by the Company was above 6.656 trillion in the year 2015 and the operating income of the company in the year 2015 was around 170.44 million. However, the company in the year 2015 declared that an accounting scandal was being investigated by the company. As mentioned by Awolowo (2016) the company also stated that it might have to reconsider and mark down the figures for its profit for the past 3 years. The pressures of the company to show a profit in the revenue of the company lead to this accounting scandal. The problem main started as the employees of the company started understating the costs on the long term projects of the company. Between the years 2008- 2014, the company overstated its operating profit by around 151.8 billion yen ($1.2 billion) and the inventories were also improperly valued (Jennings 2015). The main reason as detected by the investigation has been identified as the intense pressure on the subordinates of the Compan y by the CEOs for meeting the sales targets. This made the subordinates of the company to increase the sales figures of the companys profit. The two former CEOs of the company who are accused of the scandal are Atsutoshi Nishida and Norio Sasaki. Due to the investigation of this Toshiba scandal, the Prime Minister, Shinzo Abe had to make changes in the key theme of the corporate governance as an attempt so that he could revive the economy of the Japan to attract the outsider investors in the Japanese economy(Addady 2015). Overall Analysis: The importance of understanding different contexts within which the accounting operates could be derived from the above given discussions. In the above study the case of the BPH Samarco has been analysed and the key points of the case are highlighted. The cause and the accused for the disaster have also been identified in the study. As in the modern economy the accounting system plays a very important role in any organizational function. Also in the above taken case study the accounting standards and the principle play a very prominent and active role in constructing the companys organizational structure and the corporate governance. The activities of the accounting assess the costs and the benefits of the company and cast the important aspects that help in the functioning of the modern organizations in the terms of the economy. The outcomes of these accounting standards and the principles affect and favour the interests of both the internal and the external parties of the Company. I n the case of the BHP Samarco, the accounting standards and the principles of the company resulted in the disaster of the dam. This result of the accounting standard affected both the internal and the external parties of the company, the stakeholders and the general residential people of Brazil (Miranda and Marques 2016). The accounting and the finance of the is intertwined with the organizational structure of the company but still many of the company do not follow it or implement it in their company as effectively as it is required. In the case of the, Toshiba accounting standards were not maintained by the subordinates of the company and so it resulted in an accounting scandal for the company. Conclusion: The present study above is on the case of the Bhp Samarco. From the above study it could be concluded that hoe the accounting the financial factors of a company plays an important role in the corporate governance, corporate practices and the organizational structure of any company. The study of this has been shown through the case of the BHP Samarco scandal. This has been a disaster of dam collapsing in the country of Brazil due to a company named Samarco. The Samarco Company is a joint venture of the two companies Biliton and Vale. The whole case of the Samarco disaster has been summarising in the above study and the key holders of the company who were involved in this disaster were identified. The relation of the each of the stakeholders with the case has been also discussed in order to point out the real party behind the cause of this disaster. As an example to show how the accounting and the financial principles of a company affects the organizational structure and the corporate governance have also been given in the above study. Reference: Addady, M., 2015. Toshibas accounting scandal is much worse than we thought. Awolowo, I.F., 2016. Financial Statement Frauds: The Need for a Paradigm Shift to Forensic Accounting.system,7(10), p.23. Friedman, H.H. and Gerstein, M., 2016. Are We Wasting our Time Teaching Business Ethics? Ethical Lapses Since Enron and the Great Recession.Ethical Lapses Since Enron and the Great Recession (September 14, 2016). Jennings, M.M., 2015. Toshiba Lessons: on not Beingso Judgemental of the Company or japan.Corporate Finance Review,20(2), p.36. Klinsukhon, S. and Ussahawanitchakit, P., 2016. Accounting information transparency and decision making effectiveness: evidence from financial businesses in Thailand.The Business Management Review,7(5), p.112. Miranda, L.S. and Marques, A.C., 2016. Hidden impacts of the Samarco mining waste dam collapse to Brazilian marine fauna-an example from the staurozoans (Cnidaria).Biota Neotropica,16(2).