Satyam Fraud Case

Based on the case, company poor accounting system creates opportunities for Mr Praveet to commit fraud because the information on trade register was authorized and managed by Mr Praveet. There is no other personnel that in charge of the authorization of the fund such as approval of the fund from higher authority of the financial manager, Mr Mehta. Good accounting information system able to provide accurate and timely information, but this does not appear in Taj Mahal Investment Company. The accounting system is important for prevention and detection of fraud and it did not alarm an alert to the company about the losses in investment until when Mr Praveet had left the company. So, Mr Praveet easily commits fraud without notice by the

In the process of Satyam Scandal, there are several governance principles involved a few key components.

The scandal revealed in 2009 when founder-chairman of Satyam Computers Mr. Ramalinga Raju makes a clean breast that the company’s accounts were tampered with and he disclosed a Rs.7,000-crore accounting fraud in the balance sheets.

These frauds essentially amount to trickery; the perpetrator fools the company into handing over its money.

Discuss the impact to the company or brand as a result of the fraudulent activity.

At last, it was too late for the CEO, auditors, creditors, suppliers and public to realize the fraud, while the loss was so large and the lies lasted so long, which was really hard for them to prevent. They also could not admit that they were lying, it would lead to bankrupt. Finally, the internal administrators could not control it anymore and no one kept confidence on the company.

bribery payments. The SEC found these actions to be in violation of the disclosure regulations and that the actions thereby denied the public material information regarding the integrity of management and the use of corporate funds.

With the basic understanding of the definitions and fraud and corruption in a nutshell, we can then finally move on to the literature review whereby we explain the apparent existence of fraud and corruption in Malaysia and how it has effected the Malaysian

The case was analysed by multiple research accountants and the reason behind it was the intention of Scrushy to make the investor content with the financial abilities of the company along with obtaining more and more investment without any optimum yield. Scrushy was charged with the accounting fraud in 2003 of March(Beam & Warner, 2009, p.56)., more reasons were unfolded by the SEA-Securities Exchange Act about Scrushy and his posting of the company’s large loss in order to achieve a high stock sell.

Earning management or creative accounting is referred to the manipulation or misrepresentation of the company’s financial earnings in order to achieve stable and positive financial position. This was achieve through directly or indirectly use of the accounting methods. Even though the manipulation may follow all the accounting standards and laws, they may go opposite of what the standards and laws were originally trying to establish. Therefore, earning management is often considered materially misleading and referred to a fraudulent activity.

According to the journal article An Analysis of Fraud: Causes, Prevention, and Notable Cases by Kristin Kennedy we see the development of WorldCom and

The course Fraudulent Financial Reporting and Corporate Governance of prof. Hermanson is the great oversight of financial reporting and governance issues. The students are able to understand the roles of the board of director and board committees, the critique research on fraudulent financial reporting and the cycle of fraud through real fraud cases over the world. Indeed, I recognize the importance of corporate management over financial reporting. The three main things I learned from this class is understanding of the effect of board of directors on fraud decisions, elements of fraud, and the importance of fraudulent accounting to accountants and auditors

According to ICAEW, auditor independence mainly refers to the independence of the external auditor from parties that have an interest in the financial statements of the business being audited. It requires having both integrity and an objective manner to the auditing process. In order for the concept to be deemed effective the auditor needs to carry out their work freely. One of the main purposes of auditing is to increase credibility of the entity’s’ financial statements, as they have expressed their own professional opinion on the truth and fair view in accordance with the proper accounting standards used. This is only possible if the audit is made with reasonable assurance that it has come from an independent source and has not been influenced by other parties, such as managers, directors or by conflict of interest.

The company’s lack of transparency in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its demise

The modern university educationis focused primarily on providing extensive information and data, the sole purpose of which is toequip students to earn their livelihood. Thus, higher aspects of education, such as personality development, value inculcation, and self discovery are often ignored. With the focus purely on materialistic achievements, people are tempted to employ unfair means to achieve the desired object. This mentality, if extended further, can easily lead one to cheat and subsequently graduate into white collar crimes, such as fraud, forgery and false pretences. The financial impact of such crimes has been in the range of billions of dollars, according to the Internationsl Symposium of Crime. The recent Satyam Scam is only one among the many such examples.