Fraud, utilitarianism, internal control, professional skepticism.
This article describes the implementation of a “Fraud case study” in an undergraduate auditing class. The author developed an instructional case based on the financial statement fraud that occurred at Satyam Computer Services Limited (Satyam) in India. Satyam is the largest corporate fraud ($1.5 billion) in India that came to light in 2009. Ironically, Satyam in Sanskrit means “truth”. This teaching case exposes students to several auditing-related concepts: 1) corporate governance issues; 2) financial statement fraud; 3) fraud auditing (SAS No. 99); 4) ethical reasoning and utilitarian principles; 5) internal control evaluation (AS 5); and 6) regulation. This case is appropriate for auditing courses at the undergraduate and Master’s levels. This ‘teaching innovation’ provides students with an opportunity to put on an auditor’s hat and participate in some active learning. During Fall 2011, a total of 43 accounting majors participated in this case project. The students worked in groups outside of class to answer questions. They came up with several red flags associated with fraud and suggested many new internal controls. Students found the case to be interesting and were engaged in the learning process. Student learning was assessed by grading written answers (for credit) provided by student groups. Student opinion surveys were also conducted about the learning outcomes of this project and the survey results indicate strong student engagement, group learning, and satisfaction.
Journal of Forensic and Investigative Accounting
Ragothaman, S. (2014). Moha Computer Services Limited: A Fraud Case. Journal of Forensic and Investigative Accounting, 6(1), 264-271.