There are several accounting practice, which are developed in order to avoid fraud in accounting process such as Generally Accepted Accounting Principles(GAAP), International Financial Reporting Standard(IFRS) …show more content…
Satyam announce to buy stakes in Maytas infrastructure owned by promoter family of Satyam and it had been told that deal is off due to investor revolt, Satyam said it will buy the stake to keep the investor trust. December 19 , 2008 unpaid files claim have been reported and world bank confirmed a ban of 8 years to company for data theft four board member resigned promoter stake came down to 5% and then Mr Raju Resigned and confessed that he inflated the balance sheets.
The Auditors as well is a part of accounting frauds. Price water house Coopers is the auditor company for Satyam and the same had been criticized for not detecting the fraud for so long as soon as news spread about the Satyam scandal several clients left Satyam, PwC went under scrutiny , awards won by Satyam had been taken back.
Investor are as well essential part as they play an important role in detecting financial fraud and they should take more responsibility. Information should be latest and according to rules. Board Members as well can be accounted for the same. Government should also frequently check company performance and market position and there should be proper Audit tools and freedom to …show more content…
Satyam Vs Enron Scandal.
Enron was a power company. Due to pressure in the market and losses company tried to hide the losses occurred later on a level came when hiding the losses was no more possible and Enron Announce restatement of accounts . The financial statement results into reduction in share price and investor lost confidence. Investors loses their money, Employee loses their jobs and companies due were not being paid. Anderson Consultancy was the auditing company for Enron and post the scandal it lost its value and it could never came back and Accenture came into picture.
In case of Satyam, Mr. Raju Committed that he inflated the balance sheets and board of Satyam have been suspended and government took control and Later on Mahindra acquired Satyam and name has been changed to Mahindra Satyam.
If we compare both the accounting scandals. In Enron 16 people are pleaded guilty and in case of Satyam Mr. Raju admitted that he had inflated the records. We observe American Judicial System was more prevalent and Accounting Standard were better. In conclusion we can say that one should learn from both of these scandals and try to avoid and detect them in