...purpose of this case study is to identify the management issues of Satyam Computer Services Limited’s, former chairman Ramalinga Raju when he admitted to corporate fraud in 2009, and how these issues could be addressed. Satyam Computer Services Limited, (now known as Mahindra Satyam) is a “leading global information communications and technology company”. (Anon., n.d.) It is a part of the “US $15.4 billion dollar Mahindra group, a global industrial federation of companies of the top 10 business houses based in India”. (Anon., n.d., p. 1; Anon., n.d.)). 1.1 INTRODUCTION TO MANAGEMENT ISSUES “India’s corporate community experienced a significant shock in January 2009 with damaging revelations about board failure and colossal fraud in the financials of Satyam.” (Afsharipour, 2010)Ramalinga Raju and the CFO of the company were charged with “conspiracy, cheating and falsifying records. Raju was also allegedly using salary payments to fabricated employees, in order to steal money from the company.” (Anon., n.d.) This case study will explore the unethical behaviours of Ramalinga Raju, but also how ethical standards and social responsibility factors in with Satyam’s Computer Services Limited’s own management issues, which would have also contributed to the fraudulent activity that resulted in one of the biggest accounting fraud scandals in India. Secondly this case is going to explore how this case “served as a catalyst for the Indian...
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...CYBER SCAM AND ITS EFFECTS November 27, 2011 SUBMITTED BY: FETALVER, FRANCIS VIOLETA, ROGENE CRIS SUBMITTED TO: MRS. MARY GRACE P. ALFANTA I Introduction Background of the Study Experts and law-enforcement officials who track Internet crime say scams have intensified in the past six months, as fraudsters take advantage of economic confusion and anxiety to target both consumers and businesses. Thieves are sending out phony emails and putting up fake Web sites pretending to be banks, mortgage-service providers or even government agencies like the Federal Bureau of Investigation or the Federal Deposit Insurance Corp. Cell phones and Internet-based phone services have also been used to seek out victims. The object: to drain customer accounts of money or to gain information for identity theft. Most scams are done by e-mail (Spam). They entice users to give them critical information like usernames, passwords, credit card information, or other types of account information. Most of these e-mails can easily be identified as fraudulent, by identifying a couple of general characteristics. If someone pretending to represent a company or organization contact you by e-mail to supply them with usernames, passwords or other critical information by e-mail, then you can be certain it’s fraudulent. Today we have something we call SSL (Secure Socket Layer). E-mail is one of the most un-secure methods to send user information and passwords. Most organizations...
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...was EVP and a board member along with James Rigas (son) (USA Today, 2004). Together they owned the majority of Adelphia's stock and occupied the majority of the seats on the board. These two components would be key in the fraud that would ensue. The personal lives of the Rigas’ would be the root cause of their need for cash and the reason behind the fraud they would commit (USA Today, 2004). The Scandal The government described it as ''one of the most extensive financial frauds ever to take place at a public company" (Sorkin, 2004). The Rigas' used company money to construct a private golf course, own several private jets, and purchase multiple several luxury homes. They were able to do this by establishing "complicated cash-management systems to spread money around to various family-owned entities and as a cover for stealing about $100 million for themselves" (AP, 2005). In order to keep investment money flowing in, they would manipulate the books to meet analyst expectations, thus inflating the stock price and at times they would mix Adelphia's funds with their own private funds. Upon realizing the amount of funds that had been taken, Tim Rigas "limited" the amount of money his father could take to $1,000,000 per month. One example of the fraud they committed was they disguised Adelphia's actual expenses for digital decoder boxes. In 2001 the company claimed that it sold 525,000 boxes for $101 Adelphia million to an unaudited Rigas-owned company that has no cable...
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...Burning Down the House: Mortgage Fraud and the Destruction of Residential Neighborhoods Ann Fulmer March 2010 Burning Down the House: Mortgage Fraud and the Destruction of Residential Neighborhoods Mortgage fraud is bank robbery without a gun. 1 It is a high-yield, 2 low risk enterprise that has been reported in all 50 states, Puerto Rico, Guam, American Samoa, 3 Canada, 4 New Zealand, 5 Australia, 6 and England. 7 In the United States, it is committed by organized international and domestic rings, 8 street gangs, 9 terrorists, 10 drug traffickers, 11 real estate agents, 12 closing attorneys, 13 appraisers, 14 mortgage brokers, 15 The targeted victims distinguish mortgage fraud from predatory lending. In predatory lending cases the borrower is victimized by the illegal practices of the lender or its agents with respect to fees and disclosures relating to the cost of the loan. It is unfortunate that the media, consumer activists, legislators and law enforcement personnel frequently conflate mortgage fraud with predatory lending since it adds unnecessary confusion to an already complex issue and diverts attention and badly needed resources from the fight against true mortgage fraud. 2 The average “take” on a bank robbery is approximately $3,000.00. By contrast, the average straw borrower receives a “cut” of at least $10,000 and the orchestrator’s “take” in a mortgage fraud transaction frequently exceeds $100,000. In a few cases the orchestrator’s take was in excess of $1...
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...SAS 99 AND ITS CHALLENGES TO THE ACCOUNTING PROFESSION Submitted by: Ronneil I. Capones Consideration of Fraud in a Financial Statement Audit, also known as Statement on Auditing Standard 99 was issued in November 2002. It is a revision to improve the deficiencies of SAS 82 with regards to audit process and quality (Marczewski and Akers, 2005, p. 38). The revision of SAS 82 was started prior to the huge accounting scandals that shook public confidence in the reliability of audits. Nevertheless, it gave the accounting profession more focus on tackling the issues of fraud detection on audits Three key fraud risk factors are classified and described in SAS 99; incentive/pressure to perpetrate fraud, opportunity to carry out the fraud, and attitude/ability to rationalize the fraudulent action. Incentives or pressure to perpetrate fraud may arise from the threat of losing profitability as a result of failures in the industry, declining product demand, frequent negative cash flows from operations, threat of losing job because of pressure from management to meet analysts’ expectations are a few examples (Casabona and Grego, 2003, p. 17). Opportunities to carry out fraud are characterized by the following conditions; abundance of transactions with related parties not within the normal course of business, unusual complex transactions coupled with subjective judgments, ineffective monitoring by management, board of directors, and audit committee (Casabona and Grego, 2003, p.17)...
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...years that she worked there. It was discovered when Gilliken tried to use a debit card Josey had gotten for him. When asked to enter his zip code it was rejected when he put in his zip code. Upon going to the bank to address the problem it was discovered that it was her zip code that belonged to the card. Josey is currently being charged with two counts of felony embezzlement. Josey was your typical white collar criminal. She was in her 50’s with no prior criminal record, and was considered a loyal long time employee. Since she was considered a valuable employee and had been with the company for so long it seemed unlikely that she would have been capable of such a crime. There are three in the opportunity triangle that happens when fraud occurs. The three elements are commit,...
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...Con artists make money through deception. They lie, cheat and fool people into thinking they've happened onto a great deal or some easy money, when they're the ones who'll be making money. If that doesn't work, they'll take advantage of our weaknesses -- loneliness, insecurity, poor health or simple ignorance. The only thing more important to a con artist than perfecting a con is perfecting a total lack of conscience. What does the average con artist look like? Despite what you may think, he isn't always a shady-looking character. A con artist is an expert at looking however he needs to look. If the con involves banking or investments, the con artist will wear a snappy suit. If it involves home improvement scams, he'll show up wearing well-worn work clothes. Even the basic assumption that the con is a "he" is incorrect: there are plenty of con women too. You might think you can spot a con artist because he's someone you instinctively "don't trust." But the term con artist is short for confidence artist -- they gain your confidence just long enough to get their hands on your money. They can be very charming and persuasive. A good con artist can even make you believe he is really an old friend you haven't seen in years. Con artists do share certain characteristics, however. Even the best con can only go on for so long before people start getting suspicious. For that reason, con artists tend to move frequently. They may have a job that allows this, or they might claim to...
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...fictitious insurance restoration project. Difficulties in developing carpet cleaning industry made Barry Minkow think to get money in wrong way. Collaborate with Tom Padgett and also extensive social network, made this big scheme to deceive big investors became easy. After success in cheating investors, Barry Minkow think bigger to make more money. He think to make ZZZ Best Company go public. For company which want to go public, it must fulfill many requirements of SEC. One of requirements is audited by accounting public officer. To fulfill that requirement, ZZZ Best Company Inc. hired George Greenspan to perform audit for 12 months. According to his testimony regarding ZZZ Best scandal to congressional subcommittee that investigated fraud in ZZZ Best Company, Inc., Greenspan insisted that he has proprtly audited Minkow’s company although finally Greenspan admitted that he had not inspected any of the insurance restoration sites. Next audit company which audited Minkow’s company was Ernst and Whinney. From Greenspan confession, he already communicate with Ernst and Whinney as predecessor auditor who audited ZZZ Best but this statement was rejected by Ernst and Whinney. Ernst and Whinney signed an enagement letter as a proof that Ernst and Whinney had right to audit ZZZ Best Company Inc. In that contratc, ZZZ Best Company Inc., asked four services to Ernst and Whinney that the audit firm intended to provide ZZZ Best, that are: review’s company financial statement for...
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...State of Utah DEPARTMENT OF COMMERCE DIVISION OF CONSUMER PROTECTION TELEMARKETING PERMIT APPLICATION FORM OFFICE USE ONLY Date Permit Issued:_______________ Permit Number: _________________ Annual Application Fee: $250.00 (Non-refundable) Approved: ______________________ Denied: _________________________ Expiration:______________________ _________________________________________________________ (This is the name of institution that is registering.) ___________________________________________________________ Date of Application Please mark the appropriate box: [ ] INITIAL APPLICATION [ ] RENEWAL APPLICATION If you have any questions, please contact the Division at (801) 530-6601. Please make Application fee check or money order payable to the State of Utah. Please return the completed Application form and check or money order to: Department of Commerce Division of Consumer Protection 160 East 300 South, Second Floor PO Box 146704 Salt Lake City, Utah 84114-6704 Nov 2009 1. Applicant’s Name: ______________________________________________________________________ 2. Applicant’s address: __________________________________________________________________ Street ____________________________________________________________________ City State Zip Code ________________________________ _________________________________ Telephone Number Facsimile Number Telephone Number: _______________ 3. Contact Person: _______________________________________ ...
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...Barry Minkow founded ZZZZ Best (pronounced Zee Best) while 15 years old and a sophomore in high school. The business started in his parent’s garage with three employees and four telephones. Minkow struggled to meet basic expenses in the beginning. In January 1986, ZZZZ Best went public and began to sell shares on NASDAQ. However, the company began to rapidly decline. In July 1987, Minkow resigned and the company sued him for fraud allegations. This landed Minkow in federal prison, with a sentence of 25 years for 57 counts of fraud. In the beginning, Minkow struggled to meet the basic expenses of his company. Two banks closed his business accounts because the California Law did not allow minors to sign binding contracts, including checks. He began to receive several customer complaints as well as the demand for payment from suppliers. At times, Minkow also found it hard to meet payroll. Because of the lack of operating capital, Minkow financed his business by check kiting, stealing and selling his grandmothers jewelry, staging break-ins at his offices, and running up fraudulent credit card charges. With the help of Tom Padgett, an insurance claims adjuster, ZZZZ Best branched into the “insurance restoration” business. Minkow forged many documents which claimed that the company was involved in several restoration projects for Padgett’s company. Both Minkow and Padgett formed a fake company, Interstate Appraisal Services, which verified the details of the restorations to Minkow’s...
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...Chapter 1 INTRODUCTION 1.1 Definition of Cyber Crime The internet in Bangladesh is growing rapidly. It has given rise to new opportunities in every field we can think of – be it entertainment, business, sports or education. There are two sides to a coin. Internet also has its own disadvantages. One of the major disadvantages is Cyber crime – illegal activity committed on the internet. The internet, along with its advantages, has also exposed us to security risks that come with connecting to a large network. Computers today are being misused for illegal activities like e-mail espionage, credit card fraud, spams, and software piracy and so on, which invade our privacy and offend our senses. “The modern thief can steal more with a computer than with a gun. Tomorrow's terrorist may be able to do more damage with a keyboard than with a bomb”. The term ‘cyber crime’ has been evolved from two words ‘cyber’ and ‘crime’. ‘Crime’ is more or less known to each individual on his own stand point, while ‘cyber’ is almost vague in meaning to the same. So if any time anybody uses the prefix ‘cyber’, we simply mean, he is talking about something is doing online or there has certain networking system. Actually anything related to Internet falls under the cyber category. Computer crime or cyber crime is a form of crime where the Internet or computers are used as a medium to commit crime. Issues surrounding this type of crime have become...
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...Categories of Computer Crimes CIS 170 – Information Technology in Criminal Justice Dr. Nicole L. Gray Marilyn T. Hawkins October 16, 2012 Computer Crimes are criminal activities, which involve the use of information technology to gain an illegal or an unsanctioned access to a computer system with volition of damaging, deleting or alter computer data. Computer crimes also include the activities such as electronic frauds, misuse of devices, identity theft and data as well as system intrusion. Computer crimes may not necessarily encompass damage to physical property. They rather encompass the control of confidential data and critical information. Computer crimes involve activities envelop activities of software theft, wherein the privacy of the users is bound. These criminal activities envelop the breach of human and information privacy, as well the theft and illegal alteration of system critical information. The different types of computer crimes have required the introduction and use of newer and more striking security measures. Hacking: The activity of breaking into a computer system to gain an unsanctioned access is known as hacking. The act of defeating the security capabilities of a computer system in order to obtain an illegal access to the information stored on the computer system is called hacking. The unsanctioned revelation of passwords with volition to gain an unsanctioned access to the private communication of an organization of a user is one of the...
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...Auditing Research Paper City of Dixon Embezzlement 11/6/2012 ACC 235 Growing up in a small town, Rita Crundwell spent most of her life very close to the town of Dixon. She was from a well brought up, hard working family and was one of six children. Her family was very interested in horses and would participate in horse shows while the children were growing up. Rita was an honors student while in high school, landing in the top 20 out of 300 students who were in the National Honors Society (Smith, 2012). Although she graduated high school, Rita did not continue her education. The reason being that while in high school, she landed a part-time job at City Hall. Darlene Herzog, who was Dixon’s comptroller at the time, convinced Rita to stay with City Hall because she caught onto everything so quickly and was a great asset to the team. Through her hard work, Rita was able to advance herself, moving from secretary and then to treasurer. After 12 years of working with City Hall, in 1983, she replaced Darlene Herzog, who had to retire due to health problems. This placed Rita at the top of the financial department of City Hall, being named both the treasurer and the comptroller. It was the start of what would eventually lead her to be taken out of her office in handcuffs almost 30 years later. Dixon is a small town in the northern part of Illinois. It has a population of nearly 16,000 and was never rolling around in the excess money the town owned. In fact...
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...Angelica Olivarez 430 ethics Fannie Mae Accounting Scandal 2001 Ethics is based on how people should act through well-based standards. Ethics on the other hand, does not describe the way people actually act. Ethics is a prescriptive term in which people should always aim to make the right decision. Those who act on ethics do not rationalize their actions founded own perceived self-interest. The accounting profession has its own understanding and framework of ethics. Accounting applications of ethical reasoning can become a common dilemma faced by auditors, internal auditors and all others who work in the business field. For example, The American Institute of Public Accountants (AICPA) Code requires CPAs to place the interest of the public first. To place the interest of the public first means that CPAs should not place themselves, their client or their employer’s interest above the public. Many business dilemmas involve managers, CPAs, and/or top management who have placed their interest above the public’s interest. An example of an accounting and business dilemma where the public interest was not placed first is Fannie Mae accounting scandal in 2001. Fannie Mae is the Federal National Mortgage Association, a government supported entity that assist lower and middle income Americans to buy homes. The Federal Home Loan Mortgage Corporation (Freddie Mac) also assists lower and Middle Americans to buy homes. Both supported entities gain special treatment and “aimed to increase...
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...Cyber Crime has become a top priority for law enforcement on a local, state and federal level. We are becoming increasingly concerned about cyber threats, most particularly on computer intrusions and network attacks. Computer intrusions are becoming more commonplace, more dangerous and more sophisticated. Our nation’s critical infrastructure and our military’s command and control networks are most certainly being targeted by our enemies and other potential adversaries alike. Our companies are being targeted for insider information and our colleges and universities for their valuable research and development. All of that being said, cyber crime is hitting us at home as we are being targeted for fraud and identity theft and our children are often targeted by online predators. No one is immune to these cyber risks, individuals, countries, Fortune 500 companies and the neighborhood “Mom and Pop” store. These threats are evolving and expanding every day. It is important to be wary and safeguard information and cyber access by these fraudsters and predators. I am using the law enforcement perspective, one I am most familiar with, in this paper. Computer intrusions and network attacks can affect many different facets of national security and organizational information. It is clear that terrorists and their organizations are using the internet to recruit and maintain their strength. For example, in the Arabian Peninsula, Al Qaeda has produced a full-color, English language...
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