Podcast
Questions and Answers
What significant action did Yamada and Mori take to inflate the purchase price related to Gyrus?
What significant action did Yamada and Mori take to inflate the purchase price related to Gyrus?
What was the total cash payment negotiated for the grant of Gyrus warrants and preference shares?
What was the total cash payment negotiated for the grant of Gyrus warrants and preference shares?
Which accounting firm questioned the excessive M&A advisory fees paid by Olympus?
Which accounting firm questioned the excessive M&A advisory fees paid by Olympus?
Who was the British CEO appointed by Olympus in 2007?
Who was the British CEO appointed by Olympus in 2007?
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What action did Woodford take after questioning the discrepancies in the books?
What action did Woodford take after questioning the discrepancies in the books?
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Which company replaced KPMG in 2009?
Which company replaced KPMG in 2009?
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What was the role of the committee appointed after the Olympus scandal?
What was the role of the committee appointed after the Olympus scandal?
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What was one of the outcomes for Olympus after the investigation findings were made public?
What was one of the outcomes for Olympus after the investigation findings were made public?
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What position did Toshiro Shimoyama hold at Olympus Corporation in 1980?
What position did Toshiro Shimoyama hold at Olympus Corporation in 1980?
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What was the purpose of the aggressive financial assets management unit developed by Shimoyama?
What was the purpose of the aggressive financial assets management unit developed by Shimoyama?
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Who became the subordinate of Hideo Yamada in the investment dealings?
Who became the subordinate of Hideo Yamada in the investment dealings?
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What financial losses did Olympus encounter by the late 1990s?
What financial losses did Olympus encounter by the late 1990s?
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How did Yamada and Mori attempt to recover their investment losses?
How did Yamada and Mori attempt to recover their investment losses?
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What accounting standard did Olympus utilize to mask its investment losses?
What accounting standard did Olympus utilize to mask its investment losses?
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What type of financial products did the management group focus on during their aggressive investments?
What type of financial products did the management group focus on during their aggressive investments?
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What resulted from the speculative investment activities managed by Yamada and Mori over ten years?
What resulted from the speculative investment activities managed by Yamada and Mori over ten years?
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What was the maximum amount Olympus sought in compensation from its former officials over the accounting scandal?
What was the maximum amount Olympus sought in compensation from its former officials over the accounting scandal?
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Which former Olympus executive faced criminal charges related to the fraud?
Which former Olympus executive faced criminal charges related to the fraud?
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What was the fine that the Tokyo Stock Exchange imposed on Olympus for its accounting issues?
What was the fine that the Tokyo Stock Exchange imposed on Olympus for its accounting issues?
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As of March 3, 2014, what was the stock price of Olympus?
As of March 3, 2014, what was the stock price of Olympus?
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What accounting method did Olympus initially use to hide their losses?
What accounting method did Olympus initially use to hide their losses?
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What was the potential penalty for executives involved in the Olympus scandal?
What was the potential penalty for executives involved in the Olympus scandal?
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What triggered the need for Olympus to change how they accounted for their assets?
What triggered the need for Olympus to change how they accounted for their assets?
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Who conducted the investigation into the Olympus scandal?
Who conducted the investigation into the Olympus scandal?
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What financial amount was hidden by Olympus Imaging executives through their scheme?
What financial amount was hidden by Olympus Imaging executives through their scheme?
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How long did the tobashi scheme at Olympus Imaging last?
How long did the tobashi scheme at Olympus Imaging last?
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Which entity published the case study on the Olympus Imaging fraud scandal?
Which entity published the case study on the Olympus Imaging fraud scandal?
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What type of scheme was employed by Olympus Imaging executives?
What type of scheme was employed by Olympus Imaging executives?
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Who are the authors of the case study of the Olympus Imaging fraud?
Who are the authors of the case study of the Olympus Imaging fraud?
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In what journal volume and number was the Olympus Imaging fraud case study published?
In what journal volume and number was the Olympus Imaging fraud case study published?
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What was a significant factor behind the Olympus Imaging case?
What was a significant factor behind the Olympus Imaging case?
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Which university are the authors associated with?
Which university are the authors associated with?
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What was a potential consequence of Olympus's punishment for their white-collar crime?
What was a potential consequence of Olympus's punishment for their white-collar crime?
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Which individual in the Olympus case is recognized as the whistleblower?
Which individual in the Olympus case is recognized as the whistleblower?
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What two factors contributed to the prolonged crisis in Japan, as mentioned in the context?
What two factors contributed to the prolonged crisis in Japan, as mentioned in the context?
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What role did Toshiro Shimoyama hold in Olympus during the scandal?
What role did Toshiro Shimoyama hold in Olympus during the scandal?
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What is implied to be necessary for Japan to recover from its prolonged period of stagnation?
What is implied to be necessary for Japan to recover from its prolonged period of stagnation?
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Which event marked Japan's significant economic downturn post-1989?
Which event marked Japan's significant economic downturn post-1989?
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Who took over the presidency of Olympus after Shimoyama left?
Who took over the presidency of Olympus after Shimoyama left?
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What effect does the Olympus case represent regarding ethical standards in accounting?
What effect does the Olympus case represent regarding ethical standards in accounting?
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What was the main consequence for Olympus following the financial statement fraud?
What was the main consequence for Olympus following the financial statement fraud?
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Which of the following was NOT a source of financial distress for Olympus as mentioned in the articles?
Which of the following was NOT a source of financial distress for Olympus as mentioned in the articles?
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What was the significant event that happened on January 2, 2012, regarding Olympus?
What was the significant event that happened on January 2, 2012, regarding Olympus?
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What approach did Olympus take in response to the crisis caused by the fraudulent activities?
What approach did Olympus take in response to the crisis caused by the fraudulent activities?
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How did Olympus's financial statement fraud impact investor confidence?
How did Olympus's financial statement fraud impact investor confidence?
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What was the public monetary consequence for Olympus regarding the fraud scandal?
What was the public monetary consequence for Olympus regarding the fraud scandal?
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Which financial reporting standard did the US not feel pressured to adopt amidst the Olympus fraud?
Which financial reporting standard did the US not feel pressured to adopt amidst the Olympus fraud?
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What was one of the key factors leading to the Olympus financial scandal?
What was one of the key factors leading to the Olympus financial scandal?
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Study Notes
Olympus Imaging Fraud Scandal
- This case study examines a 20-year scheme by Olympus Imaging executives to hide $1.7 billion in losses.
- In the 1980s, Japanese companies faced declining revenues due to a strong yen and a weak dollar.
- Some companies employed "zaiteku," speculative investments, to offset these losses.
- While Olympus initially profited in 1987, losses grew by 1991.
- Instead of admitting the losses, Olympus created a "tobashi scheme" to shift them off the balance sheet.
- This involved purchasing shell companies in the Cayman Islands with exorbitant fees.
- When Michael Woodford, the first Western President, questioned these practices, he was fired.
- Woodford became a whistleblower, exposing the scandal and resulting in executive arrests, a 80% drop in share price and a review of Japanese corporate governance.
Facts and Timeline of the Scandal
- In 1980, under Toshiro Shimoyama, Olympus' operating income fell significantly due to the rising yen.
- Hideo Yamada led the aggressive "zaiteku" asset management unit, generating large profits initially.
- Hisashi Mori worked with Yamada, moving into upper management.
- The speculative investments eventually resulted in significant losses.
- In 1998, to hide the losses, Olympus created dummy entities (“shell companies”) in the Cayman Islands.
- Transferring assets to these entities was meant to prevent these losses from being recognized in Olympus' financial statements.
- These entities were set up using funds from loans secured by assets, as collateral.
- Subsequently, inflated merger and acquisition (M&A) advisory fees were used to cover the losses.
- In 2007, Michael Woodford, the CEO, was fired after questioning the practices.
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Description
Test your knowledge on the Olympus scandal, including key figures, actions taken, and significant outcomes. This quiz covers the company's financial management practices and the events surrounding the M&A activities that led to the controversy. Explore the involvement of various executives and the impact on Olympus Corporation's reputation.
