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

Month: Current Affairs - December, 2012