| Pub. Date | : October, 2021 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP371021 |
| Author Name | : D Satish |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 8 |
On July 21, 2015, the top management executives of Japanese major, Toshiba Corporation, resigned over allegations of encouraging irregular accounting practices across various divisions of the company. Despite putting in place high corporate governance standards, it was found that various divisions resorted to window dressing due to various compulsions. The case study goes beyond the accounting scandal at Toshiba, highlighting different ways in which the accounts were manipulated. Also it looks into whistleblower policy and corporate governance systems at Toshiba in particular and Japanese corporations in general.
Toshiba was lauded as a front-runner in governance efforts, but that was a
misunderstanding. Its governance structure looked good but the execution was not.
- Kota Ezawa, Analyst, Citi Group1
Japan is changing and I think the Toshiba scandal will accelerate that, because it
shows a public desire for better governance. What is important is that Japan needs to
develop a system that is best for it, and that requires a good, rigorous public discussion.
And these scandals help.
- Bob Eberhart, Stanford Technology Ventures Program Fellow, Stanford University2
On July 21, 2015, Hisao Tanaka (Tanaka), President and CEO of Toshiba Corporation (Toshiba), resigned from his position for his alleged involvement in encouraging irregular accounting practices at Toshiba. While submitting his resignation, Tanaka apologized to shareholders, but claimed that he had not encouraged such accounting practices. He said, "Increasing profits is important, but it must be grounded in a basis of fair accounting."3 Along with Tanaka, two former CEOs, Atsutoshi Nishida (Nishida) and Norio Sasaki (Sasaki), also resigned from their positions for their alleged involvement in the scandal.4