Unmasking the Fraud at Toshiba

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.

JP Den Hartog about SP Timoshenko: Fifty Years Later

This study is devoted to Jacob Pieter Den Hartog’s views about Stephen Prokopovych Timoshenko. Both were outstanding contributors to the mechanics-based design of structures and machines. Additionally, both were refugees, who were running from hardships in their own countries. Den Hartog ran away from economic hardships that befell the Netherlands after World War I. Timoshenko escaped two Russian revolutions that took place in 1917, in addition to the takeover of Kiev by several armies, including foreign ones, and imminent Soviet rule in Ukraine. Their destinies led them to meet at the Westinghouse Electric Corporation in the USA. This study reviews two prime documents associated with their interaction. The first document is the newly discovered letter sent by Den Hartog to Timoshenko half a century ago, specifically, on the occasion of the latter’s 90th birthday in 1968. The second document is the review of the book As I Remember by SP Timoshenko that Den Hartog published in Science magazine, also in 1968. A complex interrelationship emerges between these two scientists. On the one hand, there is a tremendous appreciation felt by Den Hartog toward Timoshenko; on the other hand, one clearly observes Den Hartog’s disapproval of Timoshenko’s ingratitude to the USA, as expressed in Timoshenko’s autobiography, in numerous passages.

Shell and Plate Feedwater Heater Prototype Test

Westinghouse Electric Company and Tranter Inc. are collaborating to develop the modular, low-pressure horizontal shell and plate feedwater heater (SPFWH™) heat exchanger product. This design utilizes easily removable modules of welded heat transfer plates within a pressure vessel instead of traditional tubes as the pressure boundary and heat transfer interface between the steam and feedwater. Design advantages include improved long-term performance, inspection and maintenance access. Each SPFWH™ heat exchanger will be designed to meet all plant-specific requirements and is ASME Section VIII compliant. A prototype SPFWH™ heat exchanger design (herein called the prototype or test unit) was fabricated and tested to validate the functionality of the design features and benchmark the correlations used to predict the performance. The test was performed in the Tranter Inc. laboratory facility using full temperature and pressure steam conditions over a broad operating range typical of low pressure feedwater heaters. Heat transfer coefficient characteristics have been evaluated and the prototype test data shows good agreement with established empirical correlations and other industry research. These results indicate that the SPFWH™ heat exchanger design is a viable alternative to a shell-and-tube type heat exchanger due to the performance, compactness, modularity, and robustness of the new design.