Mumbai: Companies in India have encountered the highest number of fraud cases in the world this year, according to a new survey by Kroll Advisory Solutions—a risk management and consulting firm. Most cases related to theft of physical assets, information breach, internal theft, corruption and vendor-supplier frauds.

Indian firms, however, were more concerned about the theft of physical assets or stocks than bribery or corruption, the report added.

“What this means is that 68% of the heads and chief executive officers (CEOs) that we interviewed earlier this year said their companies had been affected by fraud," said Reshmi Khurana, associate managing director of Kroll Advisory Services, India. Globally, 839 senior executives across industries and sectors were polled.

In India, the number of firms reporting fraud fell from 84% in 2011 to 68% this year, according to the report. But Khurana cautioned the fall “is just a perception". “On the ground, frauds still prevail and the economy is vulnerable."

In India, the key challenge remains corruption and bribery-related frauds. Though the number of firms affected by corruption has gone down to 21%, it still remains persistently higher than the global average of 11%.

Globally, financial services, infrastructure and manufacturing remain the top sectors most prone to fraud. “It is not a surprise these have grown tremendously in the past few years and fraud is a challenge they face with as they grow," said Khurana.

The report warned the concern for fraud was dropping faster than fraud itself, mainly because the investor sentiments were improving and “we were seeing economies back on the growth track". Globally, the number of respondents who said they were highly vulnerable to information theft has fallen from 50% to 30%.

Khurana said what was shocking is that despite the vulnerability to fraud, only 30% of Indian firms were willing to invest in IT security, considering the increasing number of technology-related frauds.

“India is a growth market, so companies lay emphasis on investing in expansion rather than putting the bricks. That will be a concern as we mature over the years." she added.

In contrast, Chinese firms, second in line for the number of frauds, are willing to increase the investment in IT security to 70%, she said.

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