ABSTRACT
The case has been successfully used in both undergraduate and graduate courses that include intermediate financial accounting, advanced accounting, auditing, and forensic accounting. It demonstrates how poor governance structures allowed company executives and directors to circumvent accounting rules and hide investment losses for over two decades. The accounting topics include (1) methods of accounting for investments in financial instruments, (2) recognition and measurement of goodwill at the time of acquisition, and (3) consolidation accounting. The case requires students to link economic events to business decisions, and understand the financial reporting ramifications of those decisions. The case also requires students to critically analyze corporate governance mechanisms, and to consider the external auditor's responsibility for detecting and communicating financial statement fraud.
Keywords: Olympus, goodwill, fair-value accounting, corporate governance, financial reporting fraud, auditing
Source : Saurav K. Dutta, Dennis H. Caplan, and David J. Marcinko (2014) Blurred Vision, Perilous Future: Management Fraud at Olympus. Issues in Accounting Education: August 2014, Vol. 29, No. 3, pp. 459-480.
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