Solution
Sarabjeet answered on
Sep 29 2021
Scandal
Satyam Scandal
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Introduction
The scandal is often the tip of the iceberg and they represent a "visible" catastrophic failure. This article attempts to delve into and examine India's Enron, Satyam Computers "creative accounting" scandals and their scandals/frauds have raised big questions in the whole corporate governance framework in India. Therefore, in a listed company, such "creative" accounting consists of fraud as well as investigations initiated by several government monitoring agencies (Nanavati, 2012). Accounting frauds committed by founder of Satyam in year 2009 is linked to a fact that "behavioral science is greatly influenced by human greed, ambition moreover the desire for wealth, power, glory, and fame." "There is urgent need" to prove this scam. Good behavior based on the strong ethics, corporate governance, as well as accounting and auditing standards. "Contrasting Enron, which sank because of the" agent "problem, Satyam succumbed to the" tunneling "effect. Satyam scandal highlights the importance of securities law and CG in emerging markets (Mohd Hidir, 2019). In fact, Satyam's fraud has "Promoted the Indian goverment to strengthen CG norms in order to prevent the same frauds in the future." “Therefore, it is necessary to study major financial reporting fraud in order to obtain "lessons learned" as well as "follow-up strategies" to reduce occu
ence of such type of fraudulent incidents. Also rise in a rate of white-collar crimes “requires strict punishment and efficient enforcement of the law in a strict spirit.”
Three audit accounting issues that arose during the Satyam collapse
This is a form of fraud because they misrepresent the financial position of company and confuse the market and other stakeholders. Even the basic facts for example income, operating profit, cash balances, and interest liabilities have been inflated to show the company is in good standing. This includes corporate governance and bogus audit practices, which are allegedly conducted in collusion with auditors as well as chartered accountants. The company provides inco
ect accounts to its stock exchanges, board of directors, regulators, investors moreover all stakeholders (Vishwanath and Narapareddy, 2014). The sponsor is the main culprit, although it is about impossible to distort the facts without forgiveness of auditors moreover few executive board members. It seems that independent directors have no knowledge of the actual state of books. In the case of Satyam, his founder Ramalinga Raju, honesty is not what they want to make profitable. He wants to make money by avoiding taxes, books and giving money. The word "Satyan" means "truth" in Sanskrit, but Raju's resignation indicates that the company is feeding investors, at least financially, to shareholders. Customers and employees must have a steady consumption of "untruth". Satyam's boss, Mr.Raju followed the spirit of the company's name when he led the company, not at all? On January 7, 2009, he revealed some shocking facts. He admitted that there were 78 billion rupees ($ 1.47 billion) in fraud on Satyam Company’s balance sheet, which was hiding for a long time. B. Ram Raju has covered all the years of the company's board of directors, senior managers moreover auditors. Unfolding of a story behind confession reflects the insidious and immoral nature of a person, and until recently he has won a Good Corporate Governance Award (Sturgess, Argyrous and Rahman, 2016).
Satyam's corporate culture has no clear or implicit code of conduct. Bribery, co
uption and exchange of interests occur frequently at all levels within and outside the company (Roy, 2015). It was too late, the World Bank announced in the third week of December 2008, that Satyam was forced to announce Satyam's unethical work culture to steal data and
ibe employees, and with the World Bank Trading was banned for almost eight years. Because company provide bank employees with "inappropriate interests and therefore, the company's ethical standards are very poor. Both CEO and the CFO are accused of placing their interests above the company's interests. A few months before acknowledging the scandal fraud, they are actively selling most of their shares. The behavior of the company's top executives is immoral, and there is no evidence that senior executives use the company's resources to pursue personal ethical behavior or behavior within a few years (Roy, 2015). Internal controls do not appear to detect fraud for long periods of time. Satyam's corporate governance excellence achieved the Golden Peacock Award of the World Corporate Governance Council. It is necessary for the World Corporate Governance Council to evaluate its own methods to select winners. After making a big mistake, the withdrawal of the 2002...