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FACTORS CONTRIBUTING TO FRAUD

Numerous factored contributed to the Satyam fraud. “The independent board members of

Satyam, the institutional investor community, the SEBI, retail investors, and the external auditor ‐‐ none of them, including professional investors with detailed information and models available to them, detected the malfeasance. The following is a list of factors that contributed to the fraud:

Greed

Ambitious corporate growth

Deceptive reporting practices—lack of transparency

Excessive interest in maintaining stock prices

Executive incentives

Stock market expectations

Nature of Accounting rules

ESOPs issued to those who prepared fake bills

Audit failures‐ Internal & External

Aggressiveness of investment banks, commercial banks,

Rating agencies & investors

Weak Independent directors and Audit committee

VICTIMS OF FRAUD

Employees of Satyam spent anxious moments and sleepless nights as they faced non‐payment of salaries, project cancellations, layoffs and equally bleak prospects of outside employment. “They were stranded in many ways – morally, financially, legally, and socially.

Clients of Satyam expressed loss of trust and reviewed their contracts preferring to go with other competitors. Cisco, Telstra and World Bank cancelled contracts with Satyam. “Customers were shocked and worried about the project continuity, confidentiality, and cost overrun.”

Shareholders lost their valuable investments and there was doubt about revival of India as a preferred investment destination. The VC and MD of Mahindra, in a statement, said that the development had 'resulted in incalculable and unjustifiable damage to Brand India and Brand It in particular.'

Bankers were concerned about recovery of financial and nonfinancial exposure and recalled Facilities.  Indian Government was worried about its image of the Nation & IT Sector affecting faith to invest or to do business in the county.  Unethical Business Practices  The Satyam scam is one more proof that these days there are many companies who blatantly  Thrive on unethical behaviour and practices. They seem to create an environment or try to  Promote one where acts of violation of norms to amass wealth in an unethical manner are practiced with impunity until such time it comes into the open. Companies like Satyam indulge in the following activities that come under the ambit of unethical practice:

Resorting to dishonesty, trickery or deception.  Distortion of facts with a view to misleading or creating confusion.

Manipulating executives emotionally by exploiting their vulnerabilities.  Resorting to profiteering due to excessive greed. 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。