Essay on The Ethics Of The Accounting

710 Words Dec 7th, 2015 3 Pages
There were several different ways and methods were used to manipulate the accounts in each division. For instance, the company’s computer division would sell more parts than necessary to the partners, which increased that company’s inventory, allowing Toshiba to inflate its profit figures (Kazuaki, 2015)
The auditing company that signed off on years of inappropriately calculated earnings at Toshiba was Ernst & Young. The Japanese Institute of Certified Public Accountants interviewed the accountants at ShinNihon and check documents for major items they may have overlooked, intentionally or otherwise. However, the investigation committee has already established that it does not suspect that auditors are at fault because the employees gave auditors explanations that were not reflecting realty. It would have been difficult for Toshiba auditor Ernst & Young ShinNihon LLC to detect the fraud because the improper accounting was intentional, Although, it is hard to understand the nature of the difficulties that the auditor would have encountered, but given the sheer size of the misstatement, it implores the question as to why the auditor blind to the accounting irregularities (Fuse, 2015).
Japan Exchange group that runs under the Tokyo Stock Exchange decided to examine the need of improvement in Toshiba’s internal management and if they find the need of improvement, the company would be designated as ‘Security on Alert”. The company would be given a time frame of 18 months to make…

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