The circumstances under which Satyam’s fraud was exposed is interesting in the fact that the exposure was not immediately caused by any type of regulatory or auditors finding nor was the fraud presented through specific shareholder complaints. Instead, exposure was a result of Ramalinga Raju’s actions to perpetuate his fraud through the proposed acquisition of a firm that investors rejected. The domino effect started as many investors and the media took an interest in corporate governance practices - Satyam’s were being called into question. In addition, more details and concerns were presented surrounding the fraud when a letter a former senior executive emailed the board of directors, confirming details about financial irregularities and questioned the level of liquid assets Satyam really had. The wake of destruction left in this CEO’s path can be attributed to several factors. Overshadowing all of the individual factors is the need for increased governmental regulation and revised laws, specifically for companies not registered in the stock market. First factor to mention is the governance mechanism Satyam used can certainly be called into question. With Raju and his family members often in a director role and serving on the board of the many of his non-public 327 companies, it can be much easier to facilitate this activity absent standard governance practices that a public company would be required to follow. Another factor to discuss is the competency of the board members which could lead to failures at Satyam. The structure of the board left the impression that leveraging internal members to be part of the board was not likened as it was only the two founding brothers and 2 other internals with limited knowledge of the business sitting on the board. The qualifications and occupational background of the independent board members may also play a factor – a board composition with strong ethical and educational backgrounds as well as a better understanding of the actual business may have been able to uncover any types of fradulant activity much earlier on. Third, the auditing function failed on all three levels at Satyam. Both internal and external auditiors ignored financial irregularities that should have easily been questioned and reviewed my early on. Regularly examining policies and procedures and having auditors with required experience and competence would have decreased the chances of this fraud from occurring. The absence of an effective governanve enabled much of the activity to occur. The constant cover up and reports of profits and were inflated made it harder and harder for Satyam to continue. Internal Controls are designed to promote efficiency and effectiveness of operations, compliance with policies and procedures, and reliability of financial reporting. Because controls are inherent in the everyday operations of the business, they are critical for a company to prevent or at least reduce the exposure to fraud risk. There are several different types of controls that are necessary to help companies gain some level of comfort that fraud can be prevented or detected. In the case of Satyam, one of the primary controls is the Board of Directors. The board provides monitoring and oversight related to strategic and financial decisions. Also, an Accounting Committee was established to oversee and work with the auditors. Further, internal and external auditors have the responsibility to monitor internal controls and evaluate the reliability of the financial statements. Note that government regulations, such as the accounting standards of India and IFRS, help facilitate financial reporting by auditors and firms. Finally, corporate governance and company policies on ethics are important internal controls to help in the prevention of fraud. Corporate Governance is extremely important in order to ensure that strategic decisions are made effectively and in the interest of stakeholders. The
Given strong profit growth, has there been any damage to Baidu.com’s reputation? I am convinced that there has been a significant damage done to Baidu.com’s reputation. Baidu.com, an online news also known as the “Google of China” was involved in a case involving human’s health. The rumor about Baidu.com was that the company neglected its ethical code of conduct by accepting bribe to protect a certain number of milk manufacturing company from online searches about the tainted milk scandal. Though…
place. In this case, Ballistico is a professor who is conducting a research and has come to some new findings. According to his professions, he should be honest and objective to his research and it is his responsibility publishes the results as what it originally was to enable the…
implemented Agile Development Process to improve productivity. Developed software and hardware requirements working directly with customers and internal development staff. Regularly interacted with clients for feedback to improve efficiency. Mahindra Satyam Computers Service Limited, Hyderabad, India, June 2007-March 2011 Software Engineer - Customer Profile Repository (CISCO) Designed and developed Automation Testing framework for Customer Profile Repository (CPR). Trained a team of three…
lectures and tutorials. The primary aim is to understand the effect and impact that business processes, competing and/or complimentary technologies and information systems have on an organisation. This means that just describing a technology or how the case study organisation uses a technology is an inadequate response to this task, and will not be rewarded in the marking scheme. There is an expectation that your submission will be analytical, and must draw on theory to frame its evaluation of an organisation’s…
Edexcel Level 7 ASSESSMENT ACTIVITY : UNIT No: 2 UNIT NAME: Managing Change in Organisations ASSESSMENT NO: 1 OF 1 FOR THIS UNIT Full Name: RAHUL DESHMUKH 4 Intake: October’ 2008 Date issued: ____________ Date due: February 13, 2009 Date submitted: June 01, 2009 Assessor(s):_______________________________________ Learning Outcomes: 1, 2, 3 Unit outcomes Outcome Evidence for the criteria Feedback Assessor’s decision Internal Verification 1 Explore the background…
CASE REPORT 1: STARBUCKS Team 8 – Jahanzeb Zafar, Justin Pugel, Satyam Bharadwaj, Anthony Pece CAUSES OF SUCCESS Howard Schultz started from group up In 1981, Howard Schultz (Current Starbucks chairman, president and chief executive officer) had first walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later as the Director of Marketing. A year later, in 1983, Howard traveled to Italy and became captivated with Italian coffee bars and…
An agency relationship is where a principal hires another person (called an agent) to carry out the work of the principal in a fiduciary capacity. In case of a corporation, the board of directors who constitute the top management are the agents elected by the principals (stockholders) to carry on the business. An agency problem is where there is a conflict between the agent and principal in terms of…
basin unclear, and some creepy region units. This highlight is released function, focusing on a replacement .some of them tried to run a little on the terrible nature, but very true that there will be endless and leveling, as in everything else. In the case that a strong partnership and cooperation under the control of qualified people then can enterprises in the light of the system, people will reduce the overall game to buy their things, or to use its development and without it would be that they make…
Banking sector 3 The Budget preparation and presentation, factors influencing the annual budget, role of (5) subsidies and foreign exchange reserves 4 Companies, balance sheets, AGMs window dressing of balance sheets, the loopholes (the case of Satyam) (5) 5 Stock exchange, Sensex and its ups and downs, need for stricter monitoring, how to (5) cover Stock Exchanges, qualities of a good stock exchange reporter 6 Ethics for…