Corporate Fraud In India Is Becoming A Menace
In a recent survey by international consultancy major KPMG on corporate India ( “India Fraud Survey Report - 2008? ) , it has been revealed that fraudulent activities have become a huge concern to companies. 
The study has revealed that, corporate fraud has increased 54 percent since a similar report was done in 2006. Financial sector is leading the pack followed by real estate and infrastructure sector.
The survey shows that companies pay bribe or other facilitation payment to do business in India. And senior management employees are most likely to get involved in these shadow dealings than other employees as they have access to sensitive company information and can override controls. The unethical behavior and lack of clearly laid down anti-fraud measures have made India Inc. a haven for thugs. Service providers are also involved with corruption in a big way. Its no surprise that losses caused due to fraud or corruption is mounting really high.
According to Deepankar Sanwalka, head of forensic services, KPMG India -
“With the increase in the number of business transactions combined with the lack of effective monitoring, frauds are a real time threat for most corporate houses in India. It comes as a surprise that even larger firms operating in India do not have adequate risk management strategies.”
Factfile of the Survey:
- 70 percent companies believe fraud will increase over the next 2 years.
- 75 percent respondents identified fraud as a matter of highest concern.
- 80 percent said fraud poses a big problem.
- 60 percent acknowledged fraud occuring in their own companies.
- 5 percent companies lost more than Rs. 100 millions due to fraud.
- 11 percent lost between Rs. 1 to 100 millions due to fraud.
- 53 percent reported loss less than Rs. 1 million.
- Unethical behavior of employees and inadequate anti-fraud measure main worrying factors.
- 60 percent respondents do not have adequate knowledge of anti-corruption law.
- Financial sector hit worst - followed by real estate & infrastructure - pushing IT & ITeS to third place.
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