A presentation on forensic accounting and window dressing with examples

1. WINDOW
DRESSING
AND
FORENSIC
ACCOUNTING
Mitra Pranoy Pandi
IMB2023027

2. TOPICS
Window Dressing
Case Study: Toshiba
Forensic Accounting
Case Study: Olympus
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3. WINDOW DRESSING
Art performed by Companies

4. WINDOW DRESSING
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Window dressing refers to the practice of manipulating financial statements to present a more favorable picture
of a company's financial position.
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It's also called as creative accounting which is considered as art unless it goes against any laws
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This can be done by inflating revenues, understating expenses or liabilities, or using other accounting tricks to
make the company appear more profitable than it is.
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it's technically considered as legal for a limit and its unethical because By presenting a false picture of the
company's financial health, investors may be misled into making poor investment decisions. In addition, window
dressing can erode trust in the financial system and undermine the integrity of financial reporting.
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Reasons for window dressing are attracting potential investors, avoid higher taxes ,to avail credit and loans from
banks, increase share market value.
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5. METHODS
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Creation of Secret Reserve
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Under-valuation and Over-valuation of inventorie
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Switching to different method of depreciation
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Selling off fixed assets
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Postponing cash payment
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6. SAMPLE FOOTER TEXT
A CASE STUDY
ON TOSHIBA.
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Toshiba Corporation, founded in 1875, is a well-established Japanese company that has undergone several
mergers, acquisitions, and expansions throughout its history, The company operates in various sectors.
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The scandal came to light in 2015 when it was revealed that Toshiba had manipulated its financial results for
several years. The company's reported operating profit had been artificially inflated by overstating income and
understating costs which were overstated by approximately US$1.2 billion.
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The primary method used for this manipulation was the "percent of completion" (PoC) method of accounting for
long-term contracts
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Factors Contributing are C-Suite Pressure, Auditor Negligence, Auditing System in Japanese Culture.
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The Toshiba accounting scandal exposed the vulnerability of even well-established companies to financial
manipulation and highlighted the need for strong corporate governance, vigilant auditing practices, and a culture
that encourages transparency and ethical behavior.
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8. FORENSIC
ACCOUNTING
The art reviewer

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The integration of accounting, auditing and investigative skills yields the specialty known as Forensic Accounting.
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Quantification of Damages and Loss of Profits, Assessing the effect on profitability, cashflow, income or value,
that a party claims to have incurred, or may incur, because of either a breach in a contract, personal injury,
product liability, breaches of the Trade Practices Act or Fair Trading, etc.
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The importance of forensic accounting cannot be overstated. In today's world, financial fraud is becoming more
sophisticated and harder to detect
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A Forensic Accountant is often retained to analyze, interpret, summarize and present complex financial, business
related issues financial fraud and other white-collar crimes in a manner which is both understandable and properly
supported.
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FORENSIC
ACCOUNTING

10. SAMPLE FOOTER TEXT
A CASE STUDY
ON OLYMPUS.
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On April 1, 2011, Michael Woodford, a non-Japanese executive, became the President and COO of Olympus
Corporation known for his success in managing the company's profitable European operations.
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Around three months into his tenure, Woodford was alerted to an article that accused Olympus of financial
statement fraud, He started inquiring about the allegation the Chairman of the Board for clarification.
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Woodford commissioned an independent audit to investigate the allegations. The audit report alarmed him, and
he requested the resignation of few executive members
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But in return the board started allegations in Woodford and dismissed form his position cited as differences in
management style.
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The case study provides insights into the complex interplay between corporate culture, whistleblower
protection, and financial fraud detection. It underscores the significance of transparency, ethical conduct,
and the need for cultural adjustments to prevent and address financial misconduct effectively.
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12. THANK YOU
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