Fraud- Satyam Computers Limited, India Research Paper - 1

Fraud- Satyam Computers Limited, India - Research Paper ExampleFrom being the fourth largest IT Company, with high profile, the outsourcing high society has been embroiled for having the biggest scam in history. Formed in 1987 by Ramalinga Raju, the society grew and become a insurrection star in Indian outsourced computer service industry. With the rising importance of IT in the market, the company cognise an estimated compound growth rate of 6.4% by 2007. The company attracted a lot of investors and it grew significantly. Raju, the managing director, attracted up to 300 customers world-wide and 13, 120 technical associates. A year later, the company had shown a compound growth rate of 35% and earnings per share rose from $0.12 to $0.622. On the other hand, Satyams stock tripled to 300%. The company save generated a significant growth as well as increased shareholder value. In 2009, Raju, by means of a letter to the company, disclosed that he had been manipulating the accounti ng numbers of the company for several years. He except claimed that he had overstated the assets on the companys remainder sheet by $1.47 billion and to stupefy the matters worse, almost $1.04 billion cash and savings bank loans claimed by the company was not-existent3. The company had underreported all the liabilities on the balance sheet and overestimated the income for several years so as to meet the expectation of the analyst. For instance, the results showed 97% profits and 75% revenue increase.The director and the firms global head of the internal audit used miscellaneous schemes to perpetuate the fraud. Raju used his personal computer to develop several bank statements and falsified the accounts so as to expound the non-existent balance sheets. In fact, he inflated income statements by making interest claims using fake bank accounts. As the scam revealed further, it was evident that Raju had created over 6000 counterfeit salary accounts and directed the money there anyti me the company make deposits.