A Fraudulent Financial statement is generally defined as the deliberate misrepresentation of the financial situation of an enterprise to mislead financial statement users like their stakeholders. They might be committed due to the situational pressure, perceived opportunity or a way to rationalize the act as justifiable. One such example was the Satyam scandal, in India which occurred in 2009. Satyam was an Indian IT and accounting firm. The main culprit for the scam was Ramalinga Raju who was the CEO of the company during that period. The company falsely increased its revenue by $1.5 billion. Fake invoices and bills were created in addition to which a programme was devised to hide or show the invoices in the company’s system.

Satyam had made a web of around 356 companies to help the company divert its funds. There was a company which received unsecured loans of ₹ 600 crore. The cash raised by the scam was used to buy a lot of property to ride a booming realty market. It was becoming a growing problem for the firm as the facts had to be monitored to keep showing a healthy profit for Satyam as the size of scale of the company was increasing. There were many tries made to reduce the gap but all attempts failed. When the last attempt of selling some of his subsidiary companies to Satyam failed, Raju made a confession about the scam in a written form addressing the board of directors. Raju himself said that, “it was like riding a tiger, not knowing how to get off without being eaten.”