Accounting scandals are political and/or business which arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets or under reporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates.
A few large companies have been alleged to have manipulated their financial statements. I was interested in the case of Olympus Corporation accounting scandal- 2011. As a result of the scandal, Olympus Corporation was sued by six major banks at Japan. these bank includes; Mitsubishi UFJ Trust & Banking Corp., Master Trust Bank of Japan Ltd., Japan Trustee Services Bank Ltd., Trust & Custody Services Bank Ltd., Nomura Trust & Banking Co., and State Street Trust & Banking Co. Several articles (Bloomberg) suggests that Olympus Corporation was sued for $273 million in damages over a 13 year fraud!
Financial manipulation may have helped Olympus Corporation by attracting more investors in the short run, however, being sued for over $273 million over 13 year? Is it really worth it? didn’t think so!
Bloomberg Article on Olympus Accounting Scandal.