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Plagiarism Scan Report: Plagiarised Unique Words Characters

The document discusses corporate fraud and two prominent corporate scams: Satyam Computer Services and Enron. It provides details on the Satyam fraud where the promoter inflated revenues and balances through fake client billings and bank accounts. In response, the Indian government took prompt action to rescue the company and passed new legislation to prevent future frauds. The Companies Act addressed issues like mandatory auditor rotation, consequences for financial misreporting, and increased board accountability. The key lessons are to minimize harm from fraud quickly and enact new laws to fix systemic problems.

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Jayash Kaushal
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38 views2 pages

Plagiarism Scan Report: Plagiarised Unique Words Characters

The document discusses corporate fraud and two prominent corporate scams: Satyam Computer Services and Enron. It provides details on the Satyam fraud where the promoter inflated revenues and balances through fake client billings and bank accounts. In response, the Indian government took prompt action to rescue the company and passed new legislation to prevent future frauds. The Companies Act addressed issues like mandatory auditor rotation, consequences for financial misreporting, and increased board accountability. The key lessons are to minimize harm from fraud quickly and enact new laws to fix systemic problems.

Uploaded by

Jayash Kaushal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Date: November, 07 2021

PLAGIARISM SCAN REPORT

8% 92% 897 5810


Plagiarised Unique Words Characters

Excluded Url : None

Content Checked For Plagiarism


Corporate fraud refers to criminal offences committed by an individual or an organisation in a dishonest or unethical manner. This sort of
commercial fraud is usually committed to benefit the culprit, whether an individual or a corporation. Corporate fraud schemes differ from
other types of fraud in that they are more intricate and have a financial impact on the organisation, other employees, and third parties, and
they go beyond an employee's ostensible function. When a multinational corporation's top executives commit corporate fraud, the sums
involved are often in the billions of millions. Customers or clients, creditors, investors, competitors, the deceitful corporation, and its staff are
all victims of corporate fraud. Almost every time a scam is discovered, the perpetrator is forced to declare bankruptcy. After it has been
spent by criminals, much of the money obtained illegally through corporate fraud is never recovered. Following are the two most prominent
corporate scams: 1. Satyam computer (Satyam) Satyam was India's first large-scale financial scam, startling the public and forcing the
government to overhaul its laws, reporting, and governance processes. In the United States, the fraud had the same shock and awe effect
as Enron and Lehman Brothers. Sarbanes-Oxley, the most restrictive law ever adopted, was enacted as a result of these scams, and
several countries followed suit with similar restrictions. The company's promoters devised ingenious ways to execute large-scale frauds by
misrepresenting billings for services provided to international clients. As a natural next step, fake revenues were received in multiple bank
accounts established up in various nations. Many of these accounts turned out to be untrue in the end. Large bank balances were
frequently displayed in the company's financial reports, which was unusual for a small IT firm. The promoter was in control of the entire
operation with the support of a separate crew dedicated to what I would call a fraud factory. Fake bank confirmations and statements were
manufactured and given to auditors as evidence of balances at the end of the financial year to satisfy auditors. The swindle's total value
was believed to be in the billions of dollars. Surprisingly, Satyam has been recognised for its corporate governance achievements by a
number of significant organisations. Its promoter had earned the respect of the business as well as a horrible reputation over time. The
promoter's fast admission of fraud stunned the country in these circumstances. Satyam had a good business plan in place as well as a
large worldwide client base when everything was said and done. The government had to start an extraordinary rescue operation to salvage
the company, which began with the expulsion of the company's board members and continued with Deepak Parikh's recruitment of
professionals to serve on the board. The Mahindra Group later bought the company, and it is now a key element of the company's thriving
technology sector. While the special court's decision to find all 10 defendants in the Satyam case guilty puts finality to what was
unquestionably corporate India's greatest scam, the most crucial component is the government's prompt action on all fronts. After
bypassing the board at one point, the government moved rapidly to aid Satyam's sale, guaranteeing that the firm and its employees would
not suffer excessively even if the legal process took years. If Satyam was India's Enron moment, the government didn't disappoint when it
came to enacting legislation to try to prevent another Satyam—it didn't happen as quickly as the US's Sarbanes-Oakley Act (SOX) after
Enron and WorldCom, but when the next Satyam happened, the government didn't disappoint when it came to enacting legislation to try to
prevent another Satyam but when the next Satyam happened, the government didn't disappoint when it came to enacting legislation to try
to prevent another Satyam. One of the most obvious problems at Satyam was that the board of directors, particularly the independent
directors, were completely unaware of what was going on with Ramalinga Raju's fake bank balances and fictitious clients, and the special
court has stated that the firm's auditors were complicit, not blind. The new Companies Act, which has seven schedules, 29 chapters, and
470 parts, has endeavoured to address all difficulties since it was finalised with Satyam as a backdrop. Apart from the mandatory rotation of
auditors and audit firms—an audit firm can only be employed for two terms (10 years) and an auditor for one (5 years)—cheating the books
has serious consequences, including the debarment of the entire firm (not just individual auditors), as well as the possibility of class action
lawsuits and prison sentences. Boards of directors, particularly independent directors, have been given significantly more power and
accountability. The audit committee has been tasked with ensuring that accounts are cast honestly, and it has the authority to investigate
any matter presented to it by the Board, as well as the possibility of hiring outside consultants to do so. The audit partner and audit
committee are not responsible for preventing fraud; instead, they are responsible for regularly evaluating internal controls and risk
management systems. Related party transactions must also be scrutinised with a fine tooth comb by the audit committee, as they are a
useful tool for syphoning off cash in many situations. Fraudsters will eventually break even the most strict legislation and institutional
safeguards, but the Companies Act has done its best to put them in place. The most essential takeaway from the Satyam event is to act
promptly to minimise harm and then pass legislation to address systemic issues.

8% Plagiarized

If Satyam was India's Enron moment, the government didn't disappoint either when it came to formulating legislation to try and prevent
another Satyam— ...

https://www.coursehero.com/file/p17090m/Various-charges-have-been-made-by-CBI-for-the-offences-that-are-created-like/

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