Question

a. Share a brief summary of one accounting scandal. b. Do you think most businesses behave...

a. Share a brief summary of one accounting scandal.

b. Do you think most businesses behave ethically and report their numbers fairly, or do you think that companies "fudge the numbers' most of the time?

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Answer #1

(a) Satyam Computers was an Indian based IT company having its headquarters in Hyderabad. In the year 2009, it was noticed that the company had inflated its revenue by $1.5 billion and was involved on of the biggest accounting scandal of its time. Later, an investigation by the CBI discovered that the manipulation to the revenue, margins and accountingw cash balances was done by the Chairman of the company. The Chairman admitted the fraud by writing a letter to the other Board members and that led to a crash in the share prices of the company as well.

(b) To my understanding, most of the businesses behave ethically and report their numbers fairly. It is very few business houses that manipulate their data and are caught or will be caught one day or the other.

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