Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: cpt :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: VAT Audit :: articles on VAT and GST in India :: form 3cd
 
 
« News Headlines »
 Seven things you must do before 31st March
 Income Tax saving investments: Top 5 options available for high-income individuals
 How to use zero tax rule on long term capital gains on stocks
 GST Returns - Furnishing details of inward supplies
 5 ways to maximise you income tax return
 Income-tax (2nd Amendment) Rules, 2017
 Soon, Faster PAN, An App For Filing Tax Returns
 Changes in income tax return filing process
 New Income Tax Rates And Deductions Applicable From April 1, 2017
 Tax and transparencya
 No decision yet on imposing tax on cash transactions

Satyam misused accounting software
May, 04th 2009

The former management of scam-hit Satyam Computer Services had kept loopholes in its accounting software and left passwords unsecured to facilitate fraud, the Serious Fraud Investigation Office (SFIO), which is probing the scandal, has told the government. The software system for managing companys financial accounting functions was deliberately made very complex for inflating profits, the SFIO said in its report.

The report said different departments of the company were not integrated electronically and the management overlooked this weakness to dupe investors and other stakeholders.

The invoice management system of Satyam had a weak password protection, making the system vulnerable to misuse. Therefore, fake invoices could be created by unauthorised users. SFIO has also found that in order to balance the collections against these fictitious invoices, they were first shown as receipts in the current account maintained with the Bank of Baroda, New York Branch and subsequently they were shown to be transferred to other bank accounts as fixed deposits.

Against these fixed deposits, the promoters were regularly generating fake quarterly balance confirmation letters showing the amounts of fixed deposits and the interest accrued on them. These forged current account balance statements and confirmation letters were fed into Satyams accounting software Oracle Financials for the quarterly audits of the company.

Soon, three other bank accounts in India, Citi Bank, HDFC Bank and HSBC were also used for this purpose of falsification of current account balances.

There were no validation checks for a number of invoices. The SFIO report points towards a serious control deficiency in the system that facilitated entering of unauthorised transactions, making unauthorised payments and non-detection of unauthorised activities.

No internal passwords were required to access the database of Oracle Financials, which increased the possibility of unauthorised changes to the programmes.

The report says Price Waterhouse, which audited Satyams accounting software, had pointed out to the companys audit committee that the weakness in the system may result in mis-statement of the annual or interim financial statements. The report further says that the audit committee chairman denied receiving such an input.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Contact Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions