ACCOUNTING FRAUD AND ACCOUNTING STANDARDS: THE CASE OF TOSHIBA'S FRAUDULENT ACCOUNTING

This study addresses the case of Toshiba's fraudulent accounting in 2015 and examines its implications for setting accounting standards while considering the linkage between theory and practice. If this case is not an isolated case, then what is the problem with the existing accounting standards? The purpose of this study is to clarify this. In conclusion, this case was not a special case insofar as we considered it in this study. In general, it might be difficult to judge their appropriateness for some expenses in practice. Accounting frauds committed using these items would not be a problem of Toshiba only. If we try to judge whether an accounting treatment that is based on a firm's future expectations is right, we need to share at least the probability space that the firm assumes. As a result, it is necessary to look into the extent of costs and benefits obtaining by the users of information when financial statements contain data where it is not possible to determine whether this data is appropriate or not. This equilibrium solution would decide the extent of management's decision in the socially appropriate accounting standards.