Name : Ria Ayu Windia
Npm :1912128005p
Class : 2ak-p2
TOSHIBA FINANCIAL SCANDAL COMPANY
In May 2015, Toshiba defeated the whole world when it announced the company was investigating an internal accounting scandal and had to revise its profit calculations in the past 3 years. This announcement is very unexpected because Toshiba has become a symbol of a very powerful Japanese company. After being investigated as a whole, it is known that Toshiba has had difficulty achieving business profit targets since 2008 in the midst of a global crisis. This crisis also hit Toshiba's business until finally Toshiba made a lie through accounting fraud worth 1.22 billion US dollars. This action was carried out with various efforts to generate profits that are not in accordance with reality.On July 21, 2015, CEO Hisao Tanaka announced his resignation over an accounting scandal which he described as the most damaging Toshiba brand in 140 years of Toshiba's founding history. Eight leaders also resigned, including two previous CEOs. Toshiba's name was removed from the stock index and significant sales were issued. By the end of 2015, Toshiba had lost 8 billion US dollars.Financial statements begin when a third-party audit investigates the company's finances. Based on the information contained in the company's management, target earnings that are not in accordance with current targets that are not appropriate, division leaders must understand by manipulating financial statements.Toshiba has a corporate culture that demands a superior, and this is an important factor that results in the practice of manipulating financial statements. In addition the results of the investigation also showed internal problems so that Toshiba failed to prevent signs that were detrimental to the company. Although the management of Toshiba has started hard to restore difficult conditions, until early 2017 Toshiba is still in the process of recovering from a bad scandal in 2015.
My Response: In my opinion here Toshiba's Financials made a mistake because they had fabricated financial statements to cover unrealistic profit targets. In preparing financial statements, they should prioritize the principles of honesty, accountability in preparing reports, and making financial reports in accordance with the facts of the company's operational activities that have been happened and may not be engineered, because of this the Toshiba company suffered a loss and finally the CEO resigned So that the Toshiba company had to get back up to cover losses and must try to increase profits by improving the financial statement audit system based on the correct accounting standards of the company, even though at that time there is a global crisis.