Toshiba 's Lasting Reputation Of Innovation And Constant Growth

884 Words Feb 25th, 2016 4 Pages
Toshiba’s lasting reputation in innovation and constant growth was stunted when over $1.2 billion dollars was deemed fraud. Profits over seven years were overstated and undetected by independent auditors of Ernst & Young. When the fraud was eventually discovered, minimal was done to the culprits including resignation and probation. Since the discovery of the fraud, Toshiba has started to see the consequences of the fraud be alleviated and trust be regained. This paper serves as an insight into the aspects behind the fraud and how auditors could potentially discovered the fraud.

Company Background

Toshiba did not get its name until 1978 when two Japanese companies merged. Tanaka Seizo-sho, establish in 1875, was a lead manufacturer of telegraph equipment. It merged with Hakunestu-sha, which was the first plant to manufacturing incandescent lamps in Japan in 1890. When they merged in 1939, they focused on electrical equipment and eventually became one of the lead innovators in many different industries including health care, electronics, and even energy. Toshiba is a public company with over 4 billion shares issued to over 345,000 shareholders. Today, Toshiba focuses on technical innovations and sell a variety of electronics including laptops, tablets, digital displays and electronic storage. Currently, Toshiba has net sales of over $55 billion.

Auditor Background

Ernst & Young were the auditors that were involved with Toshiba when the fraud was uncovered. The thing that…

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