Accounting Fraud in Satyam Computer Services Ltd

Satyam Computer Services is an international Indian technology giant. After a series of irregularities in the period preceding year 2009, the World Bank executed an eight-year relationship bar for the business between Satyam and itself (Satyan, 2015). The above resulted in critical investigations for Satyam with the findings indicating one of the biggest accounting fraud.

The investigations were carried out simultaneously by three bodies – two from India and one from the United States because there were many American investors in Satyam. The three investigators found out tremendous extents of accounting fraud. The investigations found out that Satyam’s ex-chairman indulged in heavy tax evasion through fixing of accounting entries (Sharma, 2009). He used favor exchanges and bribery to lure the accountants into fabricating accounting records. For instance, the balance sheet for the company as at September 7th, 2008 indicated a significant amount of accrued interest which in reality did not exist. Ideally, the ex-chairman included such figures to make it hard for the detection of the fake deposits that he used to cover for the fake inflated profits. As a result, he managed to imply that the company had fixed deposits of Rs 3318 while the real figure was under Rs 10 (Sharma 2009).

In light of the above findings from Satyam’s accounting fraud, it is possible to highlight actions that would have helped to prevent such crime. Ensuring the compliance of the code of ethics is one of them. Employing and adhering to independent external auditors could have helped too. The presence of an independent whistle-blowing system would have been efficient. Additionally, the company could have set definite penalties referring to every possible civil crime carried out by any stakeholder. More so, the company could have used sanctions provisions to combat cases of insider trading.


Satyan, R. (2015). India Law Retrieved 28 April 2015, from

Sharma, J. (2009). What Went Wrong With Retrieved 28 April 2015, from


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