Corporate frauds on rise in India- Survey
As per the findings of India Fraud Survey Report 2012 published by KPMG, around 75% surveyed corporate in India believed that the incidences of fraud were increasing. As per the report:
- Decline of ethical values, weaker internal control system, reluctant managers for taking the decisive action were major reasons.
- Mistake of senior management tasks by the audit committees, weak regulatory mechanisms major concern.
Sales, distribution and procurement are most susceptible areas of fraud.
- Competition to surpass market expectations was the primary reason behind financial fraud
- Fraud in financial statement was a primary concern
- Absence of recognized fraud risk management system
- In coming years, Computer-related and e-commerce frauds would become major concerns,
- Around 75% frauds were committed by the employees
The important findings of the Survey are as follows:
- 63% say the desire to exceed market expectations is the main reason to commit financial fraud
- 81% say financial statement fraud is a major issue
- 41% say they do not have a formal fraud risk management framework
- e-commerce & computer-related fraud to be a source of major concern in the coming years
- 75% all fraudulent activities, except Intellectual Property (IP) fraud were perpetrated by employees