Answer to Question #296719 in Marketing for Ikay

Question

Instruction: Search on the internet for a business organization/company that has been or currently involved in a corporate accounting scandal.

You are going to assess the organization/ company based on the following:

✓ Company profile, total assets, and revenues ✓ How the scandal happened

✓ The amount of money involved

✓ People who were involved

✓ Individuals who were affected

As a finance student, what do you think is the impact on the organization/company based on the scandal they are facing? What are the measures that you will do if given the chance you are the Finance Officer of the company? And, how will you address and handle affected individuals that will be affected by the situation?

Answer 1

Satyam Computer Services was an Indian IT services and back-office accounting firm based out of Hyderabad, India. In 2009, it was discovered that the company had inflated revenue by $1.5 billion, marking one of the largest accounting scandals.

An investigation by India’s Central Bureau of Investigation revealed that Founder and Chairman, Ramalinga Raju, had falsified revenues, margins, and cash balances. During the investigation, Raju admitted to the fraud in a letter to the company’s board of directors. Although Raju and his brother were charged with breach of trust, conspiracy, fraud, and falsification of records, they were released when the Central Bureau of Investigation failed to file charges on time.