Fundoo Professor
Fundoo Professor
When you dig a hole too deep...
Wednesday, April 29, 2009
If you start small by booking some fake revenues...
....eventually you will have to book much larger fake revenues to maintain the growth rate implied by your stock price and the hole you’ve started to dig will become deeper...
... and then to prevent your receivables from going out of line with your revenues, you’ll have to show you received money which is really not there from people who are really not there. And then your accounts will show that your bank has lots of money which is really not there and the hole you are digging will become deeper and deeper...
....and if you claim you have money in the bank which is really not there, you’ll have to invent interest income which is really not there and the hole will get even deeper...
... and then if you are earning so much interest income which is really not there, you’ll have to show that you are paying taxes on that income that is really not there and the hole will become even more deep...
And then a day will come when the hole will sooooo deep that you won’t be able to get out of it... And then what?
The images below were taken from CBI’s report on Satyam Fraud Case.