SATYAM SCANDAL (2009)
Company: Indian IT services and back-office accountingfirm.
What happened: Falsely boosted revenue by $1.5 billion.
Main player: Founder/Chairman Ramalinga Raju.
How he did it: Falsified revenues, margins and cash balances to the tune of 50 billion rupees.
How he got caught: Admitted the fraud in a letter to the company's board of directors.
Penalties: Raju and his brother charged with breach of trust, conspiracy, cheating and falsification of records. Released after the Central Bureau of Investigation failed to file charges on time.
Response : according to me, the Satyam fraud is baffling because, unlike Madoff and Enron, it seems that it was so transparent it should have been spotted much earlier, before it grew to a point where it will likely bring down the firm. The auditors just have to be called to account, because checking on cash balances is both a simple and necessary part of their job. How could employees of one of the big four global accountingfirms make such a mess of their assignment, year after year?
Sebagai balasan Fibi Rizki Herdianti
Re: Accountant fraud and response
oleh alfiyyah ulfah zahiroh -
ItΓÇÖs true that the high profile board of directors and senior officers of the firm should also have smelled a rat. But in a large public corporation, where reputable auditors were certifying the financial statements, their laxness in monitoring might have been understandable. After all, SatyamΓÇÖs performance (unlike MadoffΓÇÖs) was not obviously ΓÇ£too good to be trueΓÇ¥ as measured by the benchmark of industry leaders. There is a lot of blame going around on poor corporate governance in India. In fact, though corporate governance in India is not great, the level of board inattention we saw here was not very different from most companies in the US.