Toshiba Corporation (2015)

Company: Toshiba Corporation, a manufacturer of technology products

What happened: Fraudulent bookkeeping led to the inflation of profits by at least
1.2 billion over a seven year period.
How they did it: In the worst accounting scandal Japan has seen in years, a thirdparty panel found that Toshibas top management had pressured employees to
reach overly ambitious profit targets, and that a closed corporate structure that
didnt allow subordinates to oppose their managers led to fraudulent bookkeeping.
A further inflation of profits totaled 151.8 billion JPY over a seven-year period.
How they got caught: An independent investigative panel uncovered the accounting
improprieties.

Singing River Health System Scandal (2014)

Company: Jackson County based community hospital system
What happened: Reported $88 million dollars in fake earnings
Main Players: Former CEO Chris Anderson, Former CFO Mike Crews, KPMG
How they did it: Material misstatement of the Allowance for Doubtful Accounts
How they got caught: New management and new auditors discovered the problem
Penalties: To be determined
Unify Corporation (2000) Company: Unify Corporation now known as Daegis Inc.,
developers of database management systems and tools for database development.
What happened: The complaint alleges that from May 1999 through May 2000,
Mikailli and Pado caused Unify to recognize revenue fraudulently on transactions
that they knew were subject to contingencies (including rights of return or
cancellation), or involved barter transactions
Main Players: Unify CEO Gholamreza (Reza) Mikailli, 49, of Saratoga, Calif., and
former CFO Gary L. Pado, 38, of Sacramento, Calif.
How they did it: Causing Unify to provide funds its customers needed to buy Unify
products, with no reasonable expectation that the customers would ever repay the
funds.
How they got caught: Series of complaints.
Penalties: Mikailli was convicted of security fraud and conspiracy charges in 2003.

Legato (1999)
Company: Legato, based in Mountain View, Calif., develops and sells software for
managing the data storage functions of computer networks.
What happened: The complaint alleges that from May 1999 through December
2000, Malmstedt and Huetteman caused Legato fraudulently to record millions of
dollars in revenue on orders that were contingent on resellers' ability to sell the
product to an end customer, or on customers' rights of exchange, return or
cancellation.
How they did it: caused Legato to recognize revenue on a $7 million purchase order
that was contingent on further successful negotiations between the parties.
Pursuant to this arrangement, if the negotiations broke down, the customer had the
right to cancel the purchase order. The cancellation right was set forth in a separate
side letter, drafted by Huetteman, which stated in part: "This contingency may not
be expressly stated in the order letter, because of the impact on revenue
recognition. However, you have my assurance that in the event that we can not
reach terms we will not hold you to the commitment to pay referenced in the order
letter."
How they got caught: Complaints.
Penalties: To be determined
Quintus (2000)
Company: Quintus was a Dublin, Calif. based developer of customer relationship
management software.
What happened: Fraud charges.
Main Players: former Quintus CEO Alan K. Anderson, 40, of Walnut Creek, Calif.
How they did it: personally forged contracts, e-mails, purchase orders, letters, and
an audit confirmation in order to boost Quintus' financial results. Anderson created
three fake transactions that ranged in value from $2 million to $7 million, for a total
of $13.7 million in nonexistent sales.
How they got caught: Complaints. Penalties: charged Anderson with one count of
securities fraud, based on the fraud at Quintus.
Reaction:
A further concentration in forensic accounting is a must, for those students
interested in preventing the next accounting scandals. Professionals, should be
more careful in picking their employers especially their accountants. Accounting
scandals may have helped students emphasize the importance of accounting. The
more students knew about what had taken place the more positive their attitude
toward accounting. Schools needs to make introductory courses more relevant to
the current business climate to encourage more students to major in accounting.
Instructors need to offer students at all levels the opportunity to explore the social,

political and ethical implications of accounting decisions. As public practice,

employers need to reinforce the ethics lessons students learn in school in the
workplace. This can be done through workshops and by making them free to raise
questions when they suspect possible wrongdoings.