Unmasking the Fraud at Toshiba

2019 ◽  
Vol 34 (3) ◽  
pp. 41-57 ◽  
Author(s):  
Dennis H. Caplan ◽  
Saurav K. Dutta ◽  
David J. Marcinko
Keyword(s):  
Earnings Management ◽  
Corporate Culture ◽  
Audit Risk ◽  
Fraud Risk ◽  
Electric Company ◽  
Capstone Courses ◽  
Auditing Standards ◽  
Accounting Estimates ◽  
Westinghouse Electric

ABSTRACT Following its purchase of Westinghouse Electric Company and subsequent macroeconomic events, Toshiba faced declining profits. In response, Toshiba engaged in earnings management through two accounting treatments. First, it delayed the recognition of losses under long-term contracts. Second, it inappropriately applied price masking to account for transfers of components between itself and contract manufacturers. Students using this case will assess how business risks and corporate culture relate to audit risk, and how accounting for price-masking transactions can lead to increased fraud risk. Students will also research aspects of auditing standards related to fraud and accounting estimates. The case is designed for auditing courses and capstone courses with an auditing component.

Design and Application Research of Audit Risk Control Program

2013 ◽  
Vol 310 ◽  
pp. 718-721
Author(s):  
Li Ya Ma ◽  
Shu Feng Wang
Keyword(s):  
Risk Model ◽  
Risk Control ◽  
Control Program ◽  
Audit Report ◽  
Audit Risk ◽  
Specific Content ◽  
Auditing Standards ◽  
Audit Reports ◽  
Independent Auditing ◽  
And Control

Strict procedures for prevention and control of audit risk is one of the most effective measures, so the research on design of audit risk control standardization program has very great practical application value. Combined with the research needs, the CPA practices respectively utilize means of summarizing method, for example, analysis method and enumeration method. The CPA practice also revealing the audit risk and audit report risk associated with different basis, combining with the traditional audit risk model. The specific content concludes the report of audit risk and then designs including audit reports preparation, audit draft, final review report to track a feedback of visit to the control standard operating requirements, and then puts forward the independent auditing standards. The auditing standards should be added to the proposal of audit report program.

Discussion of “How Does Culture Impinge Upon Managers’ Demeanor of Earnings Management? Evidence From Cross-Country Analysis”

2021 ◽  
pp. 2180006
Author(s):  
Suresh Radhakrishnan ◽  
Surya Janakiraman
Keyword(s):  
Earnings Management ◽  
National Culture ◽  
Corporate Culture ◽  
Reference Points ◽  
Future Research ◽  
Economic Institutions ◽  
Country Analysis ◽  
Cross Country

We provide a framework that builds upon the findings of Chaney, Lodh and Nandy (2021) for future research to examine the mechanism through which national culture is related to earnings management. In particular, the framework can be used to examine how specific contexts, reference points, corporate culture and economic institutions affect the relation between national culture and earnings management.

The Five-Thousand-Year Time Capsule of the Westinghouse Electric Company

Science ◽  
1938 ◽  
Vol 88 (2282) ◽  
pp. 275-275
Keyword(s):  
Electric Company ◽  
Time Capsule ◽  
Westinghouse Electric

scholarly journals Is “transgenerational response” a hidden cause of failed corporate turnarounds and chronic underperformance?

2017 ◽  
Vol 45 (3) ◽  
pp. 23-29
Author(s):  
John Oliver
Keyword(s):  
Financial Performance ◽  
Case Studies ◽  
Corporate Culture ◽  
Ceo Turnover ◽  
Business Leaders ◽  
Adaptive Responses ◽  
Content Type ◽  
Organizational Policies ◽  
And Performance

Purpose CEO turnover and chronic corporate underperformance are examined through the lens of Transgenerational Response. Design/methodology/approach The criteria for investigating Transgenerational Response in corporations consisted of identifying a Critical Corporate Incident, the number of corporate generations and the resultant corporate financial performance. Findings The evidence presented in the case studies illustrates how a Critical Corporate Incident has produced the consequential effect of chronic financial performance in the years following the incident. Research limitations/implications These case studies have not presented the “actual” adaptive responses, inherited attitudes and behaviours that have subsequently embedded themselves in a new corporate culture, post the Critical Corporate Incident, to the detriment of the long-term health and performance of each firm. Practical implications Examining CEO turnover and chronic corporate underperformance through the lens of Transgenerational Response means that business leaders can identify how a historic event has affected the performance of their firm in subsequent generations. With this knowledge in hand, they will be able to examine the inherited attitudes and behaviours, organizational policies, strategy and adaptive cultural routines that have combined to consolidate the firms chronic under performance. Originality/value This is a highly original, evidence based, idea that has the potential to reshape our current understanding of CEO turnover and underperforming firms. It will help business leaders identify how a historic event has affected the performance of a firm in subsequent generations.

scholarly journals Unconditional Accounting Conservatism and Real Earnings Management

2018 ◽  
Vol 9 (2) ◽  
pp. 203 ◽  
Author(s):  
Han Li
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Negative Relationship ◽  
Robustness Analysis ◽  
Accounting Conservatism ◽  
Real Earnings Management ◽  
Audit Risk ◽  
Operation Costs ◽  
Abnormal Operation ◽  
The Relationship

This research examines the relationship between unconditional accounting conservatism and real earnings management in China’s corporations. Using the regression models, the real earnings management proxies are found by the abnormal cash flow of operations, the abnormal operation costs and the abnormal discretionary expenses and the aggregated measures. The research sheds light on the negative relationship between unconditional accounting conservatism and real earnings management after controlling internal control quality and audit risk. The results of these inferences remain the same after dealing with the robustness analysis and the endogeneity concerns.

scholarly journals How Fraud Risk Decomposition Affects Auditors' Fraud Risk Assessments

2020 ◽  
Vol 14 (1) ◽  
pp. P26-P32
Author(s):  
Chad A. Simon ◽  
Jason L. Smith ◽  
Mark F. Zimbelman
Keyword(s):  
High Risk ◽  
Unintended Consequences ◽  
Risk Assessments ◽  
Risk Decomposition ◽  
Fraud Risk ◽  
Trade Offs ◽  
Auditing Standards ◽  
Fraud Risk Assessments

SUMMARY In this paper, we provide a practitioner summary of our paper “The Influence of Judgment Decomposition on Auditors' Fraud Risk Assessments: Some Trade-Offs” (Simon, Smith, and Zimbelman 2018). In that study, we investigate potential unintended consequences from current auditing guidance on risk assessments. Specifically, auditing standards recommend separate assessments of the likelihood and magnitude of risks (hereafter, LM decomposition) when auditors assess risk. Our study involved several experiments, including one with experienced auditors, where we found evidence that LM decomposition leads auditors to be less concerned about high-risk fraud schemes relative to auditors who make holistic risk assessments. Our other experiments involved non-auditing settings and replicated this finding while exploring potential explanations for it. After providing a summary of our study and its results, we offer concluding remarks on the potential implications of our findings.

scholarly journals Earnings Management And Privatisations: Evidence From Pakistan Evidence From Pakistan

2015 ◽  
Vol 54 (2) ◽  
pp. 79-96 ◽  
Author(s):  
Abdullah Muhammad Iqbal ◽  
Iram Khan ◽  
Zeeshan Ahmed
Keyword(s):  
Earnings Management ◽  
Discretionary Accruals ◽  
Cash Flows ◽  
Jel Classification ◽  
Short Term ◽  
Jones Model ◽  
Reported Earnings

This study examines the incidence of earnings management around the time of the privatisation of State Owned Enterprises in Pakistan during 1991-2005. Using the modified Jones model and a sample of large privatisations (minimum US$1 million), it shows that the sampled firms experienced increase in earnings, decrease in cash flows, and increase in current discretionary accruals in the year prior to and/or in the year of privatisation. The SOEs used both short term and long term accruals to inflate reported earnings. These accruals were reversed in the post-privatisation period. These findings suggest that managers of the firms slated for privatisation were engaged in earnings management to inflate their firms‘ financial worth to maximise the privatisation proceeds. Hence, we cannot reject the incidence of earnings management during privatisations in Pakistan. The results imply that the investors should carefully evaluate the to-be-privatised firms and keep in view the possibility of earnings management by the SOEs. JEL Classification: G14, G34, G38, L33, M41 Keywords: Earnings Management, Privatisations, SOEs, Pakistan, Accruals

scholarly journals Fraud Risk and Earnings Management

2019 ◽  
Vol 7 (1) ◽  
Author(s):  
Ni Nyoman Ayu Suryandari ◽  
Anik Yuesti ◽  
Suryawan Suryawan
Keyword(s):  
Earnings Management ◽  
Fraud Risk

scholarly journals Artikel Manajemen Mutu Terpadu

2019 ◽  
Author(s):  
Nur Afni Syaputri ◽  
Rusdinal ◽  
Hade Afriansyah
Keyword(s):  
Quality Management ◽  
Customer Satisfaction ◽  
Literature Review ◽  
Corporate Culture ◽  
Drop Out ◽  
Educational Services ◽  
Customer Education ◽  
The World

The aim of quality management is to ensure that all parts of the organization work together to improve the processes, products, services and corporate culture to achieve long-term success that comes from customer satisfaction. This article was prepared by the author using the system referring to the literature review. The implementation of integrated quality management in education goes through several processes from the preparation, planning, and implementation of the quality of educational services that are expected by education customers. Meeting the expectations of customer education is a quality management paradigm that must be fulfilled, so that those who drop out of school and unemployment can be minimized in the world of our education.

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