http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20100202/toyota_suit_100202/20100202?hub=BritishColumbiaHome
Summary
Saskatchewan lawyer Tony Merchant, against Toyota Canada verify that the resale value of the vehicles has dropped significantly due to problems with the accelerator. According to Merchant, Toyota Canada has failed its reputation in number of ways, first, the company was not honest and open with Transport Canada, when there were problems since the early 2000s. Secondly, Toyota has not been able to prove a reasonable solution to the problem. Merchant believes all owners deserve a compensate. An estimate of 400,000 vehicles are affected by the recall, as a result giving Toyota a total around $400 million, as each vehicle owner qualifies for a compensation from $1,000 to $3,000.
Connection
This article relates to Chapter 3 in number of ways, especially on the section about the accounting cycle. As Toyota now has to deal with their problems with the accelerator, the error has caused many changes to the entire accounting cycle. For example, new accounts would have to be opened for the recall. If Toyota lost the lawsuit, I assume entries will be made under the "losses from non-operation sources" category on the income statement. As stated in the article, the resale value of Toyota's vehicles will decrease, therefore, a lower revenue. In the end, Toyota may result in a net loss.
Reflection
I agree with Tony Merchant, vehicle owners deserve to be compensated. I was surprised to see that Toyota had started having problems every since the early 2000s. I am even more shocked to see that after 10 years, Toyota finally opens to Transport Canada. Personally, I believe if Toyota dealt with their problem right when it first occurred, their reputation would have been able to be saved. Now that it has been 10 years and Toyota are still failing in being honest and open to Transport Canada, I, for one do not feel safe being in a vehicle made from Toyota.
2 comments:
Hi there Monica. I too agree with Tony Merchant saying that vehicle owners deserve to be compensated. In my opinion, I think Toyota Canada has a very unethical behaviour. Being dishonest and hiding things from Transport Canada is one of the reasons to support my opinion. Another reason is because they were unable to provide reasonable solutions to the problems they are facing. Ethics is a big part of the accounting world. It is a company’s job to be honest and provide reasonable financial statements.
I also agree with Tony Merchant that Toyota vehicle owners should get compensation after the recall. Indeed, Toyota would need to create new accounts for the recall. I think Toyota is being unethical because they're dishonest and hid information from Transport Canada. If Toyota doesn't tell the truth soon, they will have a bad reputation, and sales may decrease; thus, leading to net loss for the company. I agree Leon, ethics is definitely a big part of the business and accounting world, as well as any other work place; Without ethics, a company may have many frauds and scams, which ultimately leads to a negative impact on the company.
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