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Olympus Corporation Fraud Case: Olympus Corporation Is Essay

Olympus Corporation Fraud Case: Olympus Corporation is one of Japan's most vulnerable companies that faced potential bankruptcy and possible jail time for its executives in 2011. The firm was founded in 1919 and it's a manufacturer of electronic equipments and digital cameras. In addition to being headquartered in Tokyo, Olympus Corporation is a multibillion-dollar company with its operations across the globe. In October 2011, the corporation was hit by a scandal when its Chief Executive Officer was suddenly fired, a decision that was attributed to a culture clash. While the chief executive had worked in the firm for three decades, he was sacked for attempting to force investigations into various acquisitions made before he was appointed as chief.

The investigations were on three acquisitions made by Olympus including the fees paid to an obscure financial advisor in 2008 worth $687 million over the acquisition of Gyrus, the British medical equipment. Secondly, the acquisition of three Japanese companies for around $773 million with most of these values written down in the same financial year. The deals were particularly questioned...

While Olympus initially denied any wrongdoing over the deals, it later admitted to using approximately $1 billion in payments to cover up investment losses. Based on an internal memo by the Japanese police, investigations were conducted to examine whether the firm worked with organized criminal organizations to obscure billions of dollars in previous losses on investments, then pay huge sums for these services.
However, internal investigations by the firm revealed that the financial transactions on these deals were efforts to hide losses on investments that were in previous decades (Greenfield, 2012). Therefore, the huge overpayment for assets and lavish fees, an estimated $1.6 billion, were fraudulent initiatives towards covering up past bad investments by various heads of the firm during this time. The actions of shifting losses off the financial books and attempting to conceal them for a prolonged period of time are behaviors of people who don't understand compliance.

A good internal controls system that…

Sources used in this document:
References:

Bovington, T. (2011, December 13). No Risk Management System at 'Corrupted' Olympus.

Retrieved June 12, 2012, from http://www.rmprofessional.com/rm/olympus_committee_report.php

France-Presse, A. (2012, March 7). Olympus Corp ex-officials Charged in Scandal. Retrieved June 12, 2012, from http://www.rawstory.com/rs/2012/03/07/olympus-corp-ex-officials-charged-in-scandal/

Greenfield, K.T. (2012, February 16). The Story Behind the Olympus Scandal. Retrieved June
12, 2012, from http://www.businessweek.com/articles/2012-02-16/the-story-behind-the-olympus-scandal#p6
"Olympus Corporation." (2012, April 20). The New York Times. Retrieved June 12, 2012, from http://topics.nytimes.com/top/news/business/companies/olympus_corporation/index.html
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