Question 1 Toshiba Announces New Chief Executive after Accounting Scandal Toshiba veteran Satoshi Tsunakawa is set to succeed Masashi Muromachi as CEO next month (Updated May 6, 2016) TOKYO Toshiba Corp. announced a new chief executive Friday, as the Japanese electronics giant looks to put itself on a new footing after suffering an accounting scandal last year. Sixty-year-old Satoshi Tsunakawa, an executive vice president and Toshiba veteran, will succeed Masashi Muromachi as chief executive next month pending shareholders approval, the company said. Toshiba fell into deep financial trouble last year after it was found to have overstated financial results for years. As part of restructuring efforts, Toshiba has cut thousands of jobs and struck deals to sell part of its semiconductor unit to Sony Corp and its entire medical-equipment business to Canon Inc. It also recently wrote down the goodwill value of its nuclear-power-plant business, including its U.S. subsidiary Westinghouse Electric Co. Mr. Muromachi, who was appointed to the position last year, was widely seen as a caretaker CEO. He will remain at the company as a special adviser, Toshiba said. At a news conference, Mr. Tsunakawa said his priority was to improve Toshibas finances and focus on its three key businesses: energy, memory chips and social infrastructure such as elevators and water systems. The new chief executive worked in the U.S. and Europe for about 15 years, spending most of his career in the medical and health-care businesses. Asked how he felt about Canon buying the Toshiba medical business, where he spent many years, Mr. Tsunakawa said: It may be a similar feeling to the one a father holds when giving his daughter away in marriage, wishing her happiness. He said he wanted to encourage integrity at the company after its scandal. It is said that in our corporate culture, people couldnt speak their opinions, he said. I want to change that. Toshiba recently gave up on talks with Fujitsu Ltd. about a possible combination of their personal-computer businesses. Mr. Tsunakawa said Toshiba could turn around its PC business on its own by narrowing its focus, but he said the company would look at all possibilities for the PC business including mergers. You are required to critically analyze on Toshiba Accounting Scandal. You also need to identify the factors lead to the profit padding scandal. Do provide recommendations in your discussions on how this type of scandals can be prevented in the future. (50 marks) Marks will be awarded based on the following category: Analysis on Toshiba Accounting Scandal Identify factors lead to the scandal 20 marks In Depth discussion on Financial Statement Fraud: (Profit Padding) (Student should provide some other real-life examples) 10 marks Critically discuss how Financial Statement fraud can be prevented: 20 marks