Most of the Frauds in Indian Companies are Not Reported

20 Jul 11: Global consultancy firm, KPMG has conducted a survey which revealed that 88% of the frauds taking place in Indian companies are never reported. Of the reported cases, enforcement action is taken in quarter of the cases, disciplinary action was taken in another quarter of cases and resignation/voluntary retirement was occurred in 19% of the cases.

348 fraud investigations from the 69 countries all across the globe were taken in to account for the purpose of survey. It is found that the fraud is detected after an average of 5 years in Asia. Whereas in North America it is 4.2 years and 3.7 years in Western Europe.

The firms authorities say that in recent years the Indian companies have tightened their controls by performing management review on the suspected candidate. They have said that due to the collective working with external parties there is an increase in the number of fraud cases.

Of the 348 cases, 50% were found to be due to the over riding of controls by the long serving or senior members in the firms. These senior members are less suspected as they have already gained the necessary amount of trust.

Some of the frauds conducted by senior members in the firms are procurement fraud like false billings from a supplier to give bribes to senior employees or employees accepting bribes from contractors for signing off inflated project costs and using companies property for their own use.

Source: Indian Express

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