Reference no: EM133306880

Financial Statement Analysis and Financial Shenanigans

Based on the case study "Satyam Computer Limited" in the attached journal:

1) Explain what indicators can be a warning to users of financial statements (investors) that there is a possibility that financial shenanigans have occurred in Satyam Computer Limited

2) Determine and explain what engineering manipulation shenanigans are used by the management of Satyam Computer Limited to manipulate its financial statements.

By grouping as follows:

a) Recording Revenue Too Soon

b) Recording Bogus Revenue

c) Boosting Income Using One-Time or Unsustainable Activities

d) Shifting Current Expenses to a Later Period

e) Employing Other Techniques to Hide Expenses or Losses

f) Shifting Current Income to a Later Period

g) Shifting Future Expenses to an Earlier Period

3) Determine and explain what cash flow shenanigans techniques are used by management of Satyam Computer Limited to manipulate its financial reports.

By grouping as follows:

a) Shifting Financing Cash Inflows to the Operating Section

b) Shifting Normal Operating Cash Outflows to the Investing Section

c) Inflating Operating Cash Flow Using Acquisitions or Disposals

d) Boosting Operating Cash Flow Using Unsustainable Activities