The article in The New York Times titled, Olympus and Ex-Executives Plead Guilty in Accounting Fraud, describes the consequences companies have to face for providing false information on their financial statements. The company was charged with inflating the company’s net worth in it’s financial statements for five fiscal years. It is known as the 1.7 billion dollar accounting cover-up. The CEO took responsibility for this act of business vice , however the people who were actually responsible for it and are being chargeed with fines of up to ten million yen and sentenced to up to ten years in jail.
The overall consequences that the company now has to face implies that the the fraud relating to its income statements was not worth it in the end. Not only were the prosecuted employees fined, but the company itself was fined up to 1 million yen. Further, the CEO, who accepted responsibility for the company’s actions but actually did not play a part in the act of fraud was fired. Something we can assume that is not written in this article is also that the company’s reputation; which was exceptionally good, is now suffering. It is also assumed that shareholders in the company have decreased in number due to the realization of the company’s actual net worth.
A lesson here to be learned by all is that it is never worth it in the end to lie about the success of one’s business as it will most definitely hurt it in the future.
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