Satyam Financial Statement Fraud: Regulators’ Dilemma How Much Disclosure is Good Enough?

In the year 2009, then Chairman, Satyam Computers Limited (hereafter Satyam Computers), India confessed to financial irregularities leading to a series of grave felonies including financial and securities fraud of massive proportion. In his statement he confessed that the misstatement in the financial statements had arisen on account of inflated profit over a period of years. This largest financial statement fraud in India, pointed to the shortcomings of the existing disclosure and governance practices of the listed firms. Questions were raised, specifically on the information value of the published financial reports of the listed companies.