Abstract : The case of Karvy Stock Broking Ltd highlights the importance of agency costs. It explores how the directors and KMP’s can abuse their power and position and commit fraud. The case also fosters use of qualitative aspects of firms such as customer satisfaction, relationship with related parties and lenders.
• To highlight the importance of qualitative aspects of company analysis i.e., customer satisfaction, pending litigation, ownership of the company, relationship with related parties and lenders etc.
• To understand and apply financial ratios and understand the nature of entity and its operations.
• To understand how fraud has happened by mis-utilization of PoA, how it can be prevented and how the clients can safeguard their interest.