Toshiba conglomerate: Can we keep going? We don't know Toshiba has filed unaudited results for its business, meaning its potential losses from the Westinghouse disaster cannot yet be quantified, putting the conglomerate at risk of collapse. The survival of the entire corporate Toshiba structure, which controls businesses making laptops, TVs, flash chips and nuclear power stations …
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How many of the execs etc will be sitting pretty on pils of cash despite crashing the company... ok they wont get a bonus this year but I bet they made a pretty penny the last few.
What about the pension funds etc. who have invested our money in this and failed in their duties to oversee the investment and watch what was going on, I bet our pensions suffer but not the rake off they have or their personal fortunes.
"What about the pension funds etc. who have invested our money in this and failed in their duties to oversee the investment and watch what was going on, I bet our pensions suffer but not the rake off they have or their personal fortunes."
Oh, it is going to be worse than that. MUCH worse. The business papers are reporting that Toshiba's current total debt, which would practically collapse in value if bankruptcy is declared, is equivalent to the Japanese nation's total bankruptcies of TWO YEARS. Their GDP will be hit by a two-year equivalent collapse in a single swipe. And the effect will ripple across the world, as so many products depend upon Toshiba memory and other semiconductors
http://toshiba.semicon-storage.com/us/top.html
Anyone in the trade care to enlighten readers as to what professional auditors such as PwC do in between routinely authorising the accounts periodically? Apart from collecting paycheques, obviously.
E.g. do they just audit the numbers in the accounts, or do the auditors have some visibility of (and ability to comment on) the business processes that lead to those numbers?
There should be a good understanding of the underlying business processes by the auditors.
A good team for a large company will have regular updates with the business throughout the year, at least to plan the audit if nothing else, and larger companies often have mid-year mini audits of particular areas to smooth the process at year-end.
However, the auditors will have a full client book, so generally speaking downtime from one client is spent auditing other clients.
There's something odd about PwC in Japan - I don't recall the specifics, but it's actually a completely separate entity due to some local regulatory requirements.
There's something odd about PwC in Japan
You may be right about Japan-specifics, but it is now fairly common for most large "professional services" firms to create a virtual global business in which the regional or national entities do not have right of recourse to the parent body or other regional operations. That's specifically and intentionally to give the impression to customers that they're dealing with a global business, whilst ensuring that a single market specific failure can't result in either failure of the global network, nor even other businesses being held liable for losses that the regional unit can't cover.
"There's something odd about PwC in Japan - I don't recall the specifics, but it's actually a completely separate entity due to some local regulatory requirements."
The "odd" is visible if you study other recent Japanese accounting scandals: in Japan, the "auditors" (note I use quotes) are, thanks to the pressures of the Japanese society, fearful of upsetting and disappointing the clients. The problem is, in auditing the clients are the very people you need to carefully inspect and, possibly, disappoint.
From Olympus to Toshiba, the auditing system of Japan has suffered a huge loss of confidence, with a few divisions of massive Western accounting firms being reduced or even being closed down. If you read the Olympus investigation's report you'll find the problem intrinsic, again due to Japanese society's pressures of conformity.
May 2015 accounting scandal - profits had been exaggerated by $1.2 billion over the previous 7 years. CEO Hisao Tenaka & 8 other senior execs (including 2 former CEOs) all resigned at the time. Chairman Masashi Muromachi took over until May 2016 when Satoshi Tsunakawa took over from the medical equipment division.
This Norwegian Blue ain't pining for the fjords, this is an ex-parrot!
I recall a big flap in the 80's (think Cold war) about Toshiba selling technology to the Russians to help their submarines be more stealthy. The U.S. was up in arms, and the government was seriously considering massive economic retaliation against Toshiba. The whole thing blew over eventually (partly because the U.S. had so many Toshiba machines). But the paranoid part of me wonders if this isn't someone, somewhere playing a long game against Toshiba to make an example.
Or I could just be overly paranoid.
"There are material events and conditions that raise the substantial doubt about the Company’s ability to continue as a going concern."
This is not an unusual clause in annual reports - in fact all startups that go public (IPO) have similar
"going concern " risks stated in IPO docs and subsequent annual reports.
Chris, you generated lots of interesting and humorous/serious comments :) ;
The Westinghouse USA mistake is unfortunate and I am hopeful Toshiba will land successfully maybe with a crushed landing gear or missing wing but bet Tosh is patched by next year and flying and ...we will have another leading technology company in trouble whom we can ramp up the industry pundit stories . But Good stuff for the College biz majors.
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