What Is The Cause Of Toshiba's Business Scandal?

831 Words 4 Pages
1 Introduction
1.1 Objective
The purpose of this essay is to examine how better application of the ASX Corporate Governance Principles could have prevented the corporate governance issues from occurring that caused the Toshiba business scandal that was unveiled in 2015.
We will discuss and define the three relevant ASX principles and the theory that supports each of the principles. We will then examine how each of the corporate governance principles chosen could have prevented Toshiba’s corporate business scandal.
1.2 Definition of key terms in the essay’s title
Corporate Governance is defined as a system of rules, practices and processes by which a company is directed and controlled.
ASX Corporate Governance Principles are principles and recommendations set out for ASX listed companies to help achieve good corporate governance. These principles are not mandatory.
Corporate Collapse is defined as financial bankruptcy or insolvency of a company that is unable to pay debts when they fall due.
Business Scandal is defined as unethical and/or illegal actions that a person/s within a company engage in.

2 Background Information

Toshiba
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2.2 Quantitative Data
During the period from 2009 to 2013 sales at Toshiba decreased by around 11% due the global financial crisis factors. (Toshiba annual report, 2015). When Tamaka was employed in 2013 results for that year improved due to new processes to improve profitability. At the end of 2014 the recorded sales increased from 5.8 trillion to 6.5 trillion. An operating income of 290 million was reported which was up by 47% (Toshiba annual report, 2015).

In March, 2015 net sales were recorded at 1,329 billion and there was an operating loss of 11 billion which led to a net income of 12.3

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