Give an example of a major accounting fraud or internal control failure issue (besides Enron) and...

Give an example of a major accounting fraud or internal control failure issue (besides Enron) and how it relates to the accounting system. That can be issues with hacking, social engineering, and other ways that the accounting system failed.

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The Satyam Scandal:

India's biggest corporate fraud involving $1.5 billion.

The founder and CEO of the Satyam Computer services Ltd(Mr.Ramalinga Raju) has confessed on January 7th 2009 to the board of directors in a 5 page letter about the fraud.

The fraud is, manipulation of the financial information of the company, mainly the cash and bank balances for consecutively 5 years.

This is a classic example of Accounting system failure and also Auditing failure.

The company escalated the sales, cash and bank balances and profits figures for consecutively 5 years and no one from the Board of directors, Auditors, and no media questioned this. And after 5 years, he himself confessed but not caught by any law body, Law and order failure. Looks like an entire Corporate system failure!

Had the auditor done his job perfectly or the law body questioned the company about the sudden escalation of figures, this scam wouldn't have occurred or atleast no this big.

ekkarill92 answered 11 months ago

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