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Toshiba Accounting Scandal

Summary of what had happened

In 2015, Toshiba which is best known for the electronic products all over the world, arised to the

World that overstated profits by 151,8 billion yen which around 1.2 billion US dollar during seven

years period. The Group had inflated its pre-tax income by approximately 30% in a number of

accounting areas such as (i) the percentage of completion method to manage the profitability of long-

term projects of the infrastructure business; (ii) the parts transactions of the visual products business

and the PC business; (iii) the recording of operating expenses of the visual products business and the

PC business; and (iv) the valuation of inventory of the semiconductor business. This failed caused

smear to the management and employees at Japan that cause corporate culture and corporate

governance practices into trouble. This case showed that accounting irregularities which is minor

problem created big problem on big corporate company fail as a scandal all over the World.

Corporate governance issues that had missed

This case happened during its three presidents,Mr. Atsutoshi Nishida (2005-2009), Mr. Norio Sasaki

(2009-2013) and Mr. Hisao Tanaka (2013-2015). At the CEO monthly meetings, the CEOs were said

to have placed strong pressure on each of the divisional presidents to achieve an unrealistic target

called “Challenge” regardless of the remaining time left until