Corporate Accounting Fraud: A Case Study of Satyam Computers Limited

  • Lal Bhasin M
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From Enron, WorldCom and Satyam,it appears that corporate accounting fraud is a major problem that is increasing both in its frequency and severity. Research evidence has shown that growing number of frauds have undermined the integrity of financial reports, contributed to substantial economic losses, and eroded investors’ confidence regarding the usefulness and reliability of financial statements. The increasing rate of white-collar crimes demands stiff penalties, exemplary punishments, and effective enforcement of law with the right spirit.An attempt is made to examine and analyze in-depth the Satyam Computer’s “creative-accounting” scandal, whichbrought to limelight the importance of “ethics and corporate governance” (CG). The fraud committed by the founders of Satyam in 2009, is a testament to the fact “the science of conduct is swayed in large by human greed, ambition, and hunger for power, money, fame and glory”. Unlike Enron, which sank due to“agency”problem, Satyam was brought to its knee due to ‘tunneling’ effect. The Satyam scandal highlights the importance of securities laws and CG in ‘emerging’ markets. Indeed, Satyam fraud “spurred the government of Indiato tighten the CG norms to prevent recurrence of similar frauds in future”.Thus, major financial reporting frauds need to be studied for“lessons-learned”and“strategies-to-follow”to reduce the incidents of such frauds in the future.




Lal Bhasin, M. (2013). Corporate Accounting Fraud: A Case Study of Satyam Computers Limited. Open Journal of Accounting, 02(02), 26–38.

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