Page 200 Olympus Finally Had Enough of the Deception Olympus removed KPMG AZSA as its group auditor in 2009 after a dispute over how to account for some controversial acquisitions. The camera-maker decided not to disclose this to the stock market. Instead, Olympus told investors at the time that KPMG's audit contract had expired and it was hiring Ernst & Young. Mori and Yamada had finally decided to unwind and write off the underwater financial assets and repay the loans that Olympus had made through its unconsolidated subsidiary. Of course, by then, the financial press had gotten wind of what was going on at Olympus. Questions 1. What role did cultural relativism and situational ethics play in the Olympus fraud? Explain. 2. Describe the shortcomings in corporate culture at Olympus? 3. Did Michael Woodford violate his ethical and/or legal responsibilities as CEO of Olympus? Use the U.S. model of corporate governance to answer this question. 4. Compare the accounting techniques used by Olympus with those used by Enron. What was each designed to do? How did each affect financial reporting? Does it seem the auditors of Olympus should have done more to fully disclose these transactions? Page 200 Olympus Finally Had Enough of the Deception Olympus removed KPMG AZSA as its group auditor in 2009 after a dispute over how to account for some controversial acquisitions. The camera-maker decided not to disclose this to the stock market. Instead, Olympus told investors at the time that KPMG's audit contract had expired and it was hiring Ernst & Young. Mori and Yamada had finally decided to unwind and write off the underwater financial assets and repay the loans that Olympus had made through its unconsolidated subsidiary. Of course, by then, the financial press had gotten wind of what was going on at Olympus. Questions 1. What role did cultural relativism and situational ethics play in the Olympus fraud? Explain. 2. Describe the shortcomings in corporate culture at Olympus? 3. Did Michael Woodford violate his ethical and/or legal responsibilities as CEO of Olympus? Use the U.S. model of corporate governance to answer this question. 4. Compare the accounting techniques used by Olympus with those used by Enron. What was each designed to do? How did each affect financial reporting? Does it seem the auditors of Olympus should have done more to fully disclose these transactions