Your answer should demonstrate your critical analysis skill with substantive discussions of the drivers, consequences, and preventions of the earning management practices in the case;

Satyam Computer Services, which was once ranked among the top three IT firms in India, boasted in early 2008 that the company had mastered U.S. GAAP accounting. “We can say with confidence that we carry out U.S. GAAP accounting as perfectly as any other global corporation …We have to comply with Sarbanes–Oxley (SOX) requirements well ahead of time” (Reason, 2009). On the morning of Jan. 7, 2009, Ramalingam Raju, the chairman of troubled Indian IT outsourcing company Satyam Computer Services, sent a startling letter to his board and the Securities & Exchange Board of India. Raju acknowledged his culpability in hiding news that he had inflated the amount of cash on the balance sheet of India’s fourthlargest IT company by nearly $1 billion, incurred a liability of $253 million on funds arranged by him personally, and overstated Satyam’s September 2008 quarterly revenues by 76% and profits by 97%. After submitting his resignation, Raju ended his letter by apologizing for his inability to close what began as a “marginal gap between operating profits and the one reflected in the books of accounts” but which later grew unmanageable (Kripalani, 2009). Satyam was charged with fraud and was later bought by Mahindra & Mahindra Inc. Satyam has come to be known as the ‘Enron of India.’ This is a case that clearly qualifies as deceptive accounting: unethical and fraudulent.