Essay On Satyam Scandal

725 Words3 Pages
The 2009 Satyam scandal in India has highlighted the shameful potential of an improperly governed corporate leader. Some recommendations can be made from the mistakes learnt from the scandal to further avoid such mishaps. First, all inaccuracies are to be investigated as a lot of fraud schemes initially start out small, with the thought that small changes here and there would not make a big difference, and is less likely to be detected. The fraud scheme at Satyam started very small that eventually grew into $276 million. Second, Corporate Governance needs to be Stronger as a Fraud of such a kind does not only look bad on a company; it also ruins the reputation of the whole industry and the country. India has been adopting Corporate
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The culture at Satyam, especially dominated by the board, represented an unethical culture. Satyam was brought to its knee due to tunneling‘effect unlike Enron, which sank due to agency ‘problem. All kind of frauds have proven that there is a need for good conduct based on strong ethics. The debacle of Satyam raised a debate about the role of CEO in driving an organization to the heights of success and its relationship with the board members and ore committees. The fraud at Satyam brought to the light the role of CG in influencing the protocols related to the working of audit committee and duties of board members (Niazi, and Ali, 2015). The government of India took very quick actions to protect the interest of the investors of Satyam, the nation’s image across the world and, safeguard the credibility of India. Moreover, Satyam fraud has forced the government to re‐write the CG rules and tightened the norms for auditors and accountants (Bhasin, 2013b). The Indian affiliate of PwC ―routinely failed to follow the most basic audit procedures. The SEC and the PCAOB fined the affiliate, PwC India, $7.5 million in what was described as the largest American penalty ever against a foreign accounting firm (Norris, 2011). According to Mr. Chopra, President (ICAI), ―The Satyam fraud was not an auditing or accounting failure, but one of CG. This apex body had found the two PwC auditors prima-facie‘guilty of professional misconduct. The CBI, which investigated the Satyam fraud case, also charged the two auditors with complicity in the commission of the fraud by consciously overlooking the accounting irregularities. The Satyam fraud, finally, had to end and the implications were having far reaching consequences. With all the 10-people involved in the multi-crore accounting fraud found guilty of

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