In July 2015, the chief executive officer of Toshiba Corporation (Toshiba) resigned over the revelation of a JP￥151.8 billion accounting scandal that shocked the world. Toshiba, a Japanese multinational conglomerate with net sales of JP￥6.5 trillion and total assets of ￥6.2 trillion, had been widely criticized in the news for the multi-billion-dollar accounting fraud. The company’s stock prices declined by 38 per cent after the accounting probe was announced, and the company withdrew the dividend that had been declared earlier. These setbacks challenged company investors, who had always regarded Toshiba as a reputable company. The investors were wondering the same thing as everyone else watching the scandal unfold: How could a company with a 140-year history do this, and why? What were the consequences? What should Toshiba do in response to this crisis?
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