In the midst of blurring memories of the Satyam scam, a KPMG Fraud Survey Report 2010 claims that the corporate fraud in India is on rise.
The corporate world is concerned about the rise of corporate frauds and feels the recent influx of financial and other commercial frauds is but a tip of the iceberg. Of the 1,000 companies surveyed, of which approximately 50 per cent respondents were chairmen and managing directors, 75 per cent claim there is a rise in the number of corporate fraud cases.
The survey results indicate that the quantum of frauds has increased manifold since the last survey in 2008 and 87 per cent respondents state that their organisation incurred fraud losses of more than Rs 10 lakh as against 47 per cent in 2008.
An industry-wise analysis reveal that respondents from financial services and consumer markets industry segments perceive the level of fraudulent activities to be significantly high in their respective industry.
Financial statement fraud continues to be a major concern and 81 per cent of the respondents say financial statement fraud as a major issue in India. Majority believes that enforcement of regulations and regulatory environment are inadequate in dealing with financial statement fraud. The report says that bribery and corruption has come as an
integral part of conducting business in India.
Also, 75 per cent of the respondents indicate that employees, reaffirming that the enemy within poses the highest risk, pulled off fraudulent activities.