Over the past twenty years, Olympus, has been falsifying financial statements. The cover up of their financial losses was exposed in 2011, when Olympus’s newly hired Chief Executive, Michael Woodford, questioned the company’s accounting transactions. On September 18, 2013, Olympus’s accountant, Chan Ming Fon, admitted to providing false information to the auditor regarding the company’s financial investment portfolios.

A company’s failure to provide truthful statements regarding a company’s financial status is recognized as fraud.  As reference to the readings, financial statement fraud is a serious issue. Over the last six years, Chan has been liquidating Olympus’s assets “to repay an undisclosed loan”.  Chan’s motive for providing misleading information was to hide the company’s huge financial loses from investors.  Before an investment is made, an investor looks at the company’s balance sheet. Investors will sell their shares and no longer invest if the company is in debt. Because Chan provided false information to hide the company’s losses, the auditor overrated the company’s net worth.  Despite the fact Olympus was successful in 2010 and 2011, the recent exposure of the cover up may cause the complete decline of the company, as the company may be removed from the Tokyo stock exchange.  

Crook, Jordan. “Down From Olympus: What’s Going On At The Beleaguered Camera Company?” TechCrunch RSS. N.p., 7 Dec. 2011. Web. 07 Oct. 2013.

Vaughan, Bernard. “Olympus Accounting Fraud.” Reuters. Thomson Reuters, 18 Sept. 2013. Web. 07 Oct. 2013.