Introduction

While the severity of each corporate fiasco varies, they are often resulted from unethical practices, poor internal controls, and the dysfunctional behaviors of corporate mangers. The purpose of this report is to address these three elements to Satyam Computer Services Ltd., and provide recommendations on how to prevent future fiascos.

Company Background

Satyam Computer Services Ltd. (Satyam) is an IT services provider based out of India, founded by Ramalinga Raju in 1987 (Ians, 2009). In 1991, Satyam was listed on the Bombay Stock Exchange with an Initial Public Offering that was oversubscribed 17 times. Satyam was a successful organization having achieved revenues over $1 billion in 2006, and in 2008 they achieved revenues over $2 billion. Satyam was also the recipient of the Ernst and Young Entrepreneur of the Year in 2007 (Ians, 2009).

Corporate Scandal

In 2009, Raju wrote a letter to the board of directors indicating that he had been cooking the company’s accounting records for years. He took responsibilities for the accounting improprieties that overstated the company’s profits and reported cash holding of approximately $1.04 billion that did not exist (Balachandran, 2009). As Raju stated in his letter to the board, his motive for his actions was that he was concerned that the poor performance would result in a take-over. Raju also expressed his actions as “It was like riding a tiger, not knowing how to get off without being eaten” (Raju’s Statement, 2009).

Unethical Practices

Based on the Satyam scandal case, it is evident that Raju’s actions were unethical practices. His desires to make the organization appear healthy in a financial perspective overshadowed the morals that distinguish right from wrong.

Internal Controls

Internal controls are designed to ensure the integrity of financial reporting, the organization