India Inc hiring experts to detect accounting frauds: KPMG
Concerned over corporate frauds especially after the Satyam scam, many large Indian companies have started hiring forensic accountants to detect misreporting in books of accounts, global consultancy firm KPMG has said.business Updated: Mar 28, 2010 13:20 IST
Concerned over corporate frauds especially after the Satyam scam, many large Indian companies have started hiring forensic accountants to detect misreporting in books of accounts, global consultancy firm KPMG has said.
"The need of forensic accountants is prevalent across industries. The current availability of industry specific forensic accountants is quite low and there exists a gap between demand and supply," KPMG Executive director Deepankar Sanwalka said.
Indian companies are rolling up their sleeves to fight against corporate frauds and are resorting to forensic accounting to ensure increased transparency in their books.
"In the wake of the growing number of fraud incidents coming to light both within India and internationally more and more companies are looking towards forensic accountants to help ensure increased transparency," he said.
The majority of corporate fraud cases involve accounting schemes designed to deceive investors and auditors about the true financial condition of a corporation.
Forensic accounting is a scientific process of gathering, analysing and documenting financial information that can stand the test of time in the courts and as such would go a long way to check the rising cases of fraud.
"With the break out of the Satyam scam several companies have become more aware and wary of the repercussions of fraud. Forensic is a word that not many were familiar with a few years ago," Sanwalka said.
Experts believe that in today's world of increasing white-collar crimes, forensic accounting could provide investors a better view of the company's accounts.
The multi-crore rupees Satyam fraud came into light in January 2009 when the then Chairman B Ramalinga Raju had confessed to overstating the accounts in the balance sheet.
To unravel India's biggest corporate fraud, the government also sought help of private forensic accountants as govt investigators were finding it difficult to figure out the intricate accounting web in the company's books.
"For a high growth economy like India, the risk of perpetration for white-collar crimes is very high. Regulators in India also are increasing focus in this space. The opportunities for Forensic Accountants and investigators for white collar crime are growing at a rapid speed," he said.