粉飾決算

• Reading: ふんしょくけっさん
• Romaji: funshokukessan
• Kanji breakdown: 粉 (fun/ko) — powder, disguise; 飾 (shoku/kaza) — decoration, adorn; 決 (ketsu) — settle; 算 (san) — calculate, accounts
• Pronunciation: /ɸɯɴ.ɕo.kɯ.kes.saɴ/

Meaning

Falsification of financial accounts; window-dressing of accounts. The fraudulent manipulation of financial statements to present a better picture than reality.

A serious financial crime in Japan involving the deliberate falsification of financial statements — inflating revenues, understating liabilities, concealing losses, or manufacturing transactions. Famous cases include the Olympus scandal (2011) and the Toshiba scandal (2015). Under the Financial Instruments and Exchange Act (金融商品取引法), those responsible face criminal prosecution. Auditors who fail to detect 粉飾決算 may also face sanctions.

Examples

1. 経営幹部が粉飾決算を指示したとして逮捕された。 Senior executives were arrested on suspicion of ordering the falsification of financial statements.
2. 粉飾決算が発覚し、会社の株価は一時取引停止となった。 Once the accounting fraud came to light, trading in the company's shares was temporarily suspended.
3. 監査法人が粉飾決算を見抜けなかったことが問題視された。 Questions were raised about the audit firm's failure to detect the falsified accounts.

Usage Guide

Context: accounting, corporate governance, legal, securities

Tone: formal

Origin & History

粉飾 (embellishment, disguise; 粉 = powder/to coat + 飾 = decoration) combined with 決算 (financial settlement, accounts). The metaphor is of coating accounts in powder to make them appear more attractive.

Cultural Context

Era: Modern

Generation: Business professionals

Social background: Corporate/Legal