Frauds in Indian business establishments and public institutions are on the rise with the financial statement frauds touching alarming proportions, said the KPMG Fraud Survey Report 2010 released on Tuesday.
Also See Fraud Survey 2010
According to many respondents, “procurement” and “sales and distribution” in Indian industry houses are most vulnerable to corrupt practices, corroborating the thoughts of 75% participants who feel fraud-related incidents are rising.
A whooping 81% feel the financial statement fraud is already epidemic in the country. About 38% of the respondents believe bribery and corruption are part and parcel in an Indian business firm to avoid legal hassles and to lure prospective clients. On the future pathways of dishonest practices, 53% of the respondent companies said e-commerce and computer-related fraud will be a source of major concern, with supply chain fraud a close second followed by bribery and corruption and intellectual property fraud.
“The need of the hour is for organisations to realise the importance of putting effective internal control mechanisms in place, so as to manage risks. Accountability is no longer restricted to a company as a whole but also streams down to each and every individual,” said Deepankar Sanwalka, head – forensic, KPMG India.
KPMG India, executive director – forensic Rohit Mahajan, said, “Being a fast paced economy such as ours fraud management is an extremely vital issue confronting us today. Managing the risk of fraud is essentially no different to managing any other type of business risk.”
The survey was conducted across various industries and at different levels with around 50% of the respondents being top honchos of their respective organizations.