Article: Post Satyam, lesser number of firms manipulate books

C-Suite

Post Satyam, lesser number of firms manipulate books

According to a UK-based investment banking group, instances of companies manipulating their books declined in FY09 compared with the previous year. It seems that post Satyam companies have become more cautious, but the main reason behind this is that corporates may not have had enough incentive to build up their balance sheets. Some of the areas for manipulation in accounting books are revenue manipulation, expense manipulation, cash pilferage etc. that also suggests that the investors need to be more vigilant in FY10, as with the capital raising window wide open, corporates’ incentive to show punchy earnings is greatly heightened.

According to a UK-based investment banking group, instances of companies manipulating their books declined in FY09 compared with the previous year. It seems that post Satyam companies have become more cautious, but the main reason behind this is that corporates may not have had enough incentive to build up their balance sheets. Some of the areas for manipulation in accounting books are revenue manipulation, expense manipulation, cash pilferage etc. that also suggests that the investors need to be more vigilant in FY10, as with the capital raising window wide open, corporates’ incentive to show punchy earnings is greatly heightened.

Topics: C-Suite

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